Perhaps you’ve just read one of the sensationalist IRS-propaganda articles in the media that says every person born on US soil is a US citizen and must file income tax reports to the US, and are at risk for huge penalties. Perhaps you heard about this situation through another person who has a US connection. Either way, you’re probably confused about what this means and what you need to do about it. We’re going to offer some advice, but keep in mind that we are not lawyers, and none of this is legal advice, it is simply a sharing of information that we’ve gathered over time that we hope will help people make sense of things.
The following information is Canada-centric, as that is what we know. We don’t mean to exclude anyone, but necessarily, people from other countries must check their particular countries laws, tax treaties and positions on FATCA. We’ve tried to keep this simple and relatively acronym free, however, some must be used. To find out what acronyms stand for or what certain terms mean, please refer to the Acronyms and Definitions post. You’ll probably also want to check out the FAQ post. We’re not attempting to explain all the complex and convoluted laws here, this is a simple overview, but research the links provided on this site and others, and you can find much more detailed information.
So, you suspect the US considers you a US person. You might be feeling a) worried, upset and frantic about how it’s going to affect you, or b) that the US will never find you because you haven’t had anything do with it for years.
In the latter case, unfortunately, it’s entirely possible that the IRS will find you, through FATCA. This new law by the US is requiring banks around the world to identify and report on their customers who are US persons. FATCA is set to go into force in January 2013, and while it violates Canadian law, nevertheless, the banks are gearing up to comply with it. They will be reviewing accounts with more than $50K, whether a TFSA, RRSP RDSP, RESP for children, GIC, or regular savings or chequing account, looking for indications of a US connection. Although the limit is $50,000 now, there is no guarantee this limit will not be lowered in the future. If you have existing accounts under the $50k, the banks will go on what they know about you as a customer (KYC/AML rules). If you open a new account, they may ask if you are a US person. There are many people fighting against FATCA, but it’s going to be some time before we know what kind of protection will be provided by the Canadian government and Canadian law courts. We also don’t know the final form that FATCA will take. The draft FATCA guidelines can be found under links on this site.
You may wonder what about credit unions. That also is a huge question. Some may have no US investments so they don’t have the IRS financial hammer over their heads. Some of these have told customers they will not comply with FATCA. Others that do have US investments or do some business in US have told their customers (also called owners) they are resisting FATCA, but they don’t know yet what they will do.
However, even if the IRS does find you through FATCA, it’s not necessarily the end of the world. The Canadian government, through the Minister of Finance, Jim Flaherty, has stated that Canada will not collect taxes or fines on Canadian citizens on behalf of the IRS, as long as that liability occurred while the person was a Canadian citizen. Further, we suspect (or maybe it’s hope) that the IRS will not expend the massive resources required to pursue us regular people (also called minnows), especially with that protection given to us by our Canadian government. The government’s stance does afford some protection, as long as you don’t have any US income on which 30% can be withheld by your bank.
If you’re in the second, frantic, category, first thing you need to understand is that this is likely to be a lengthy process for you, so you might as well take a deep breath, relax a little, and then educate yourself on your options. This is the best piece of advice we can offer: Do not rush into anything before you’ve thoroughly educated yourself. Do this for yourself before you consult any kind of a professional, whether a lawyer or a tax specialist.
There simply is no right way, or one way, to deal with this.
Some people, most particularly those who want to retain their US citizenship, feel they must comply and file all of the income tax returns, and reports on financial accounts, and continue to do so for as long as they remain a US citizen. That’s definitely one option, but not one either of the authors have much experience with, however there are people doing this. Retaining or renouncing citizenship is a very personal, and often emotional, decision. While most actually agree that it doesn’t make economic sense to remain a US citizen, they choose to do so because of emotional, financial or family ties to the United States.
Many believed they relinquished or renounced US citizenship when they became citizens of Canada years or even decades ago. For many years the US Consulate was clear, firm and direct that loss of US citizenship was “permanent and irrevocable.” They have been stunned to learn that, due to a US Supreme Court decision in 1986, the US may now think otherwise.
A few lucky ones received Certificates of Loss of Nationality at the time. Most had no idea such a certificate even existed and did not receive one.
Some lawyers think the IRS will recognize people in this group are NOT US citizens or persons. Other lawyers have advised that anyone born in US is a US citizen and that those individuals should become compliant, unless they can prove their relinquishment with a CLN. These mixed messages compound the confusion, frustration and worry.
Some people are spending the time, effort and money to come into compliance and then immediately taking the necessary steps to renounce their US citizenship.
There are choices to be made if you choose to come into compliance, such as entering a voluntary disclosure program, quietly filing all of the required years of tax returns and reports, or filing all of the reports and returns and opening a dialogue with the IRS. Each of these options must be considered carefully, most particularly the entering into one of the disclosure programs, which can be very dangerous, financially.
For the people who will try to stay below the radar and hope the IRS never finds out about them, success will be depend, in large part, on if the Canadian government will step up to the plate to uphold its laws and protect its citizens. If FATCA goes through as the United States intends, without opposition from our government, this will option will likely fail in the end.
Many people are taking steps to prove that they are not US citizens. This has been successful for several people, and they have obtained their Certificate of Loss of Nationality from the US State department, backdated to the date they became Canadian citizens. This is very good news for thousands of people around the world. If you can prove you are not a US citizen and have not been for many years, then obviously there is no need to file anything with the IRS. A CLN may be required to prove to banks that you are not a US person, but that’s something we just don’t know at this stage. FATCA draft regulations do provide an alternative to a CLN—a non-US passport or other proof of non-US citizenship and a reasonable explanation of renunciation of US citizenship.
At this time, Canadian banks have no legal authority under Canadian law to demand information about place of birth or citizenship. Unfortunately, to date, the government has not made a statement reassuring Canadians that Canadian laws will not be changed.
Others have decided that they will simply refuse to comply, even if identified as a US person. The consequences of this are just not known yet. If a person has no income from the US, no property in the US, has no possibility of inheriting from a US person, it may be an option to consider. If someone admits to their bank that she was born in the US, but refuses to fill out the FATCA-required IRS forms, the bank is required to report that person as a ‘recalcitrant account holder’ and must withhold 30% of US source income. There are consequences to a bank for having recalcitrant account holders and we just don’t know at this stage how the banks are going to deal with it. We do not yet know if it will affect your ability to retain your bank accounts, open new bank accounts, obtain mortgages or have RRSPs.
In short, some of the options are:
– Agree that you are a US person, file all past returns and reports, and continue to do so for all of your remaining years of life;
– Agree that you are a US person, file all past returns and reports, and then renounce your US citizenship;
– Prove you are not a US citizen by obtaining a Certificate of Loss of Nationality;
– Do nothing until further information is available.
This post at citizenshipsolutions.ca gives tips on What you should consider before contacting a lawyer. This is written by a lawyer who is a dual Canadian-American citizen.
Only you can decide what is right for you. Read, read, read, and read some more, and then join in the discussions and ask questions. Take your time to make sure you’re making the decision that’s right for you and your family.
good concise summary for those just arriving at the table.
Thanks, tiger! I could have used something like this when I first found out, so I’m hoping it will prove useful to others
This is the most concise synopsis I’ve read on this issue … and, boy, have I been reading since I got the shocking news last August..
I really like, too, that you have stressed the need to take time to think things over and read, read, read. As well, this area is so new that not only the general public, but even professionals have misconceptions about the law and procedures. So even if you choose to use the services of an accountant or lawyer, you really must do enough basic research on this topic so that you can evaluate if a professional really does have knowledge and expertise in this niche area.
As a point of interest, the 2006 census shows that 117,000 US-born Canadian citizens listed themselves as “Canadian Citizen Only.” However, almost no one seems to have even heard of a CLN prior to 2011, so certainly very few are likely to possess one. So quite likely that well over 100,000 Canadians are dealing or will have to deal with this.
@Tiger, thank you! And thanks for reiterating my point that people must educate themselves. Some of the stories of what people have been advised to do by so-called specialists or professionals has been just shocking. I was one of those 117,000! I wish, oh how I wish, I had a CLN, but certainly no one in my family had ever heard of one. The information my family received when emigrating in the 60’s was non-existent, and there were no attempts by the US gov’t to advise us on any of this stuff over the years. I am absolutely sure we’re not alone in that!
@Pacifica, I’m sorry for the poor response last night, I was overly tired and didn’t make much sense. First of all, I said Tiger, instead of you, my apologies. And, what I MEANT to say, was that the need for reading and educating oneself cannot be stressed enough. And then I devolved into a ramble about our emigration… not sure where my mind was. At any rate, thanks for your feedback, and I think that your point about the professionals either being misinformed, having misconceptions, etc should be stressed, and I’m going to add that to the post.
@Pacifica
Very interesting statistic from the 2006 census. I would love to remember how I might have answered any question regarding “Canadian Citizen Only”. Or perhaps I only did the short census. When you consider that many Canadians only had to do a ‘short-form’ census, that number would be considerably higher than 117,000.
Like you, Pacifica, I wish I had been able to read a brief and to the point summary like what Outragec has provided. Might have saved me alot of angst.
Very nice summary of the different options. And delivered in a very compassionate and clear manner. Bravo!
Merci, Madame! C’est tres gentil.
Thanks Victoria. Thanks also for your superb post at Franco-American Flophouse on Citizenship: Who Decides.
http://thefranco-americanflophouse.blogspot.ca/2013/01/citizenship-who-decides.html
I will post a link to this under Citizenship.
Thanks again Victoria for your new post on Citizenship Policy and Nation State Security.
http://thefranco-americanflophouse.blogspot.ca/2013/01/citizenship-policy-and-nation-state.html
Interesting that the thesis author suggested Americans Abroad could be “America’s voice in foreign lands.” Well, they’ve blown that with the FATCA Attack!
Then, there is a suggestion from the author to use “U.S. citizens living abroad as a resource for information collection and dissemination” for homeland security. Her research must be incomplete. She doesn’t seem to know that any US citizen living outside US is a “tax cheat,” “tax evader” and “traitor.”
So as a Canadian-born dual citizen, could I just show the bank my Canadian passport, say nothing about being a US person, not renew my US passport, and never cross into the US again?
@newmaple, I don’t think we know yet what banks are going to ask for regarding identification, or what questions they’re going to ask to try to determine US citizenship – IF FATCA (or an IGA) goes through in Canada. Certainly, right now, proof of ID can be shown by any number of pieces of ID, which do not show place of birth.
If you were born in Canada, you might be okay, but we’re in a waiting game, unfortunately – so much is up in the air. If you don’t go into the US again, I believe the only risk that you might run is if you have investments in the US – if the IRS discovers someone as a ‘US person’ through a bank, and the person doesn’t comply with the FATCA requirements, the bank can hold 30% of all US income.
It’s still my hope that Canada won’t cave in to the US extortion and therefore that our right to privacy and our right to not be discriminated against will be upheld.
Superb article and advice, Outraged! Well done!
(Sorry for the belated reply, I haven’t been following threads all that rigorously of late.)
Right, banks don’t currently ask about place of birth, do they? So for those of us who were born in the U.S. but lived our lives in Canada, are citizens of Canada, have always worked and paid taxes here and have nothing to do with the U.S. since we were children, our bank should not be able to identify us as “U.S. persons”, right? I can’t think of any reason my bank would have my place of birth on file…pretty sure I didn’t show any documentation that would have this information when I opened my accounts, they usually just ask for driver’s licence, etc. Although now I’m wondering if there is some way of checking their file on me just to be sure. If for some strange reason place of birth was in their records, I could switch banks before July ensuring that I provide no place of birth info. to open the new account.
Your Canadian passport shows your place of birth. BTW, I’m a dual citizen as well and opened a new savings & chequing account today at my local bank. They didn’t ask if I was a US person however in discussing FATCA with the manager she advised they are a bit confused on how to identify US persons who already have accounts. Although I file a US tax return each year along with the FBAR & FATCA forms I’ve taken the steps of completely separating my financial affairs from my Canadian wife, no joint accounts, etc.
I think common sense in looking at FATCA is important. While the IRS is hunting down tax evaders the real, and likely unspoken agenda is the need for the US treasury to have new sources of revenue. They may have just found a way of squeezing those who left the US years ago and who are the furthest thing from money launderers or tax evaders. Taxation based on citizenship has a dark side. I regret to think the Canadian government will sign the FATCA agreement but based on others who already have, it will likely be soon.
@Nick @Spencer That is the elephant in the room. Canadian banks cannot ask where you were born. The only birth certificate they can accept for opening an account is a Canadian birth certificate.
They also cannot ask about other citizenship under Canada’s Bank Act, Human Rights Act or privacy laws.
Changing those laws to allow banks to ask those questions could violate Canada’s Charter of Rights and Freedoms.
When individuals, websites or the media have asked CBA how banks will know where someone was born or if they are a “US person,” CBA has consistently evaded the question.
However, some banks are asking people with investment accounts if they are considered a US person. I don’t know how they are able to do that or if they have ever been challenged on it legally. I know one person who had a CLN responded N/A and it was accepted.
I’m not concerned about having to pay taxes to IRS. I am taking Minister Flaherty at his word that CRA does not and will not collect taxes for IRS for any Canadian citizen and will not collect penalties for any Canadian citizen or resident.
However, I am very concerned about the possibility of my bank records being submitted to a foreign government which has an “epidemic” of identity theft and where Congress has demanded FATCA information be made available to law enforcement and national security agencies.
It is now more than six weeks since Brock and Sandbox sent an Open Letter to Minister Flaherty asking a Simple Question. Do all Canadians have the same rights under Canada’ laws and Charter of Rights and Freedoms.
http://maplesandbox.ca/2013/do-all-canadians-have-the-same-rights-letter-to-finance-minister-jim-flaherty-issued-jointly-by-maple-sandbox-and-the-isaac-brock-society/
His silence on that simple point for 28 months is very troubling.
Don’t show your bank anything, and yes, do not enter the USA. Join a credit union. Then you become a MEMBER not a client. You are PROTECTED!
I checked with my credit union — informally — asking them what is my citizenship? They checked electronic and PAPER records and said “Canadian”. All my accounts were then moved to them from RBC. RRSPS were already there. I cannot have my accounts closed without a vote of the Credit Union’s Board of Directors. After 30 years as a customer, do you think that is going to happen? No. Do you think RBC would hesitate one second to turn me over? No.
Thank you for bringing this excellent post to the forefront. After such thorough CBC coverage this week, I think there will be many new persons looking for information on US citizenship-based taxation and extra-territorial FATCA. This should be among the first posts they read in the start of their own “drudge work” (as Just Me puts it) — the read, read, read and then read some more part.
Those at Maple Sandbox and Isaac Brock are also here for the emotional support newcomers will need to stay strong.
Again, thanks so much!!!
Another ‘much in one place’ resource:
Anti-FATCA Campaign Picking Up Visibility in the US and Canada: James Jatras
@Blaze – I heard your great comments on Ontario Morning talk back this AM.
Very much appreciated.
Great article! @Joe, I don’t have the option to never enter the United States. I still have a lot of family there a few of whom cannot travel this far to see me. Plus I can’t think I’d never want to go back to my home town again in my entire life for a visit. I had planned to have half my ashes placed with my grandmother there too.
I’ve relinquished my citizenship now though and am in “compliance” as far as that goes. Only had one year in which I really needed to file anything anyway but, did all five years and six FBARS just to be out clean and clear. Our credit union or the one I tried to switch to did NOT want our mortgage switched when they learned I was a U.S. person. They are very small, local to this city which was the reason I wanted to go there. They told us they “wouldn’t be able to match our current mortgage rate” When I know that’s not really quite the truth. They are small enough for now that they are just trying to avoid having U.S. persons without out right saying so. I’m going to try again with another one. Not because I will be identified. Soon I’ll have a CLN but, rather because of the way the banks have completely lost my trust over this entire issue.
I echo the thanks for this excellent and urgently needed resource for those having the nauseous OMG moment. If this (and IBS) had existed when I first learned of all this by listening to the CBC back in the fall of 2011, I would have been spared some part of the crippling anxiety and fear. I would have been clearer about the options and how to consider which path to take.
I still would have expatriated, and every day feel lighter because I did, but would have been able to save more of my Canadian family’s savings – uselessly sacrificed towards trying to achieve that perfect and elusive state of ‘compliance’ in the manner that the IRS demands – with all the cost and hazard that can entail.
Thank you Blaze for trying altruistically to spare others the hazardous rush into the quicksands. Thank you to all those who provided support and company on this road.
For some time we’ve been hearing and reading about the draconian penalties the IRS & Dept. of Treasury threaten US persons who haven’t filed tax returns or FBARs. They are indeed, fear inducing.
Having said this, there have been at least three or four amnesty programs over the last 8 or so years from the IRS/DOT to get expats and green card holders to comply. Has anyone on this board heard of penalties in excess of back taxes owed (in excess of the foreign tax credit limits) being levied on US persons permanently living in Canada? These would be penalties of 50% or more of undeclared bank accounts, RRSP’s, RESP’s, RDPP’s etc. This assumes such persons are simply US persons that did not know about filing requirements and only found out about them recently. Yes, I know ignorance of IRS & DOT laws are not accepted as an excuse however with these amnesty programs has anyone who has complied and filed all the back returns been fined? Perhaps a US/CDN tax accounting professional reading this board could respond. Thanks
@Mr A: Thanks. My comments on Ontario Morning were a follow up to Gwen’s interview.
@Spencer: I am not an accountant or lawyer. I caution you that some of them will recommend OVDI or other programs to become compliant. Yes, there are examples of where someone has paid more in penalties than the tax owing. Many others have done “quiet disclosure” by filing back returns, but not going into the amnesty program. Does anyone have a copy of Patricia’s letter to Ways and Means Committee. I don’t think she went into the amnesty program, but she paid significantly. Just Me can also tell you about his horrific experience. Bubblebustin’ entered OVDI, but I don’t think it has been resolved after more than 22 months.
My personal (not professional!) advice is stay away from OVDI or amnesty program. One program suggested people who did not know about their requirement to file FBARs might only be charged a 5% penalty on the total amount of all their assets. Why should or would any Canadian do that?!
Perhaps others could comment on that.
@Badger: The credit for this thread goes to Outraged Canadian. She posted this in the beginning of Maple Sandbox about 18 months ago. She moved it to the top of the threads this week perhaps because so many people are just now having their OMG Moment because of this week’s media coverage.
There have been few changes since then. No answers, more stress and anxiety for us, silence from Flaherty, requests for input from us, Peter Hogg’s submission and more silence from Flaherty. It has been 28 months since Flaherty said he was “cautiously optimistic” Canada would have a “complete exemption” from FATCA (didn’t happen) and 14 months since he said IGA negotiations were nearing completion and four months since he said we should know the results of IGA negotiations “soon.”
It’s interesting you used the quicksand analogy. Hazy also did that, to which I wrote Stay Out Of IRS Quicksand.
I wrote:
Excellent article and well worth moving back to the head of the queue, now that a whole lot more Canadians are having the OMG moment many of us (or our spouses) had more than two years ago.
The only thing I would add is this caution to those planning to come into compliance and continue to remain dual citizens but maintain a life in Canada or elsewhere. The US keeps adding complexities to its tax code, especially as it pertains to people with “overseas” accounts. Keeping on top of those changes is nearly impossible for anyone not living in the US and not a professional lawyer or accountant, and getting solid professional advice when outside the US is either impossible or very expensive (depending on where you live). Annually. The US tax code is very different in key respects (e.g. treatment of retirement income and retirement savings specifically, also treatment of capital gains on sale of principal residence) than is the Canadian tax code and probably some, perhaps many, other countries’ tax codes. Add to the mix the fact that certain Democrats in Congress and the Senate keep proposing to eliminate the Foreign Earned Income Exclusion and the foreign tax credit, which are what keep many overseas Americans from being double-taxed on their income by the IRS, though so far these attempts have failed. But for how long will they continue to fail? Will some (generally Democrat) manage to slip something like that through on a rider to some utterly unrelated piece of legislation (one of the many failings of the US congressional system IMO).
Add to the above the fact that any US taxes owing must be paid in US dollars on your income converted to US dollars. Hence subject to the vagaries of foreign exchange rates, for the rest of your life or as long as you remain checked into Hotel USA.
The taxes you pay in the country, province, and city of your residence are for services and goods you actually receive and benefit from where you live. What are you getting for US taxes or tax-filing expenses (even if no taxes or penalties are owing), other than whatever you get from the blue passport and your ability to cross the US border without hassle (assuming you’d be hassled, which isn’t happening yet AFAIK)? Is the cost-benefit balance worth it to you?
I suggest these considerations be factored into your personal decision-making about whether, and at what price, you are prepared to retain your US passport yet remain living outside the US. That still may be the best choice from your situation and perspective, but consider these factors, as well as those mentioned in the post above, very carefully and discuss them very thoroughly with your spouse and children, if and as appropriate.
If you reflect on the above impacts of the world-unique citizenship-based taxation system the US has had for many years (versus residence- or income-source based the way the rest of the civilized world does it), it is easier to understand the surge in renunciations of US citizenship being experienced daily at US consulates and embassies around the planet.
@Lynne,@Spencer Lynne, this is the link to Patricia’s letter to house ways and means regarding her “experience”
See this for what has happened:
http://waysandmeans.house.gov/uploadedfiles/patricia_anderson_daddario.pdf
Excellent summary, Schubert, on the consequences people will have to pay for the ‘benefit’ of having US citizenship while choosing not to live in the US. Not a price I’m willing to pay.
@ Schubert.
Nice summation. I’d add that retaining a US passport (with all the bulls–t that implies) and therefore being guaranteed hassle-free entry to the US is not necessarily true.
I have personally experienced more trouble entering as a US citizen (back when I still was one) than I ever have when presenting a Canadian passport. So one more advantage of retaining US citizenship bites the dust.
@AtticxusinCanada, thank you for posting the link to Patricia’s letter. It’s heartbreaking. It should open the eyes of those people who have that knee jerk reaction that we’re all tax evaders and cheats. And the sad thing is we all know that’s just one of many, many similar stories.
I was born to Canadian parents in the USA in 1983. We moved to Canada in 1986 and I became an official Canadian in 1999 when I received my Canadian citizenship card. I have no US passport, have never worked there, and have never filed taxes. I was told that I gave up my US citizenship when I signed an oath to get my Canadian citizenship card. I recently travelled to the US for a family vacation and the customs guard told me I was American and needed a US passport. This is the first time I’ve heard this news and have been to USA before. I started to do lots of research and finally have a plan of action. I am going to relinquish my citizenship with a US Consulate. I have emailed them, and waiting to hear back. Hopefully I will qualify but I don’t see why not. I will get a lawyer if they do not accept my relinquishment.
It’s funny because I was panicking and almost contacted the IRS and completed my taxes, which means that I wouldn’t be able to relinquish. This has been so confusing and so stressful and I feel bad for someone who might not have the resources to figure this out on their own.
SO make sure you do you’re research before you do anything!! IF you plan to relinquish, DO NOT file taxes, DO NOT get a US Passport because this will disqualify you.
It is so sad that Uncle Sam have to come down to do this to its citizens .
No one will want to marry or do business with any US person again.
@Feeling let down
You are IMO ABSOLUTELY correct in what you are doing and what you recommend for people in your situation.
I have advised others that if they are “accidental Americans” but swore an oath to the Queen in order to get a Canadian citizenship card or certificate, they have under US law committed an expatriating act if they swear it was done of their own volition (past age 18 normally but they seem to allow past age 16 in various cases) and with the intent of relinquishing any claim to US citizenship. That latter assertion can only be rebutted or refuted by actions you might take AFTER that oath, like applying for a US passport (bad bad move) or for that matter filing US tax returns. Everyone please note that on DOS Form 4079, which you must fill out on applying for a CLN (relinquishment or renunciation though there are arguments in the latter that the form should be irrelevant, but consular officers still seem to insist on it), there is a question, “do you file tax returns to the US, IF YES PLEASE EXPLAIN” my emphasis and paraphrasing of the wording, check it out. Filing a tax return to the IRS is an admission/assertion of US citizenship unless you are a non-resident alien reporting certain kinds of US-source income which non-resident aliens must file with IRS under US law.
This advice about relinquishment particularly applies to anyone who committed their expatriating act before 2004 (arguable) or 1994 (dead certain AFAIK). Willingly swearing an oath of allegiance to another country (you will likely need to produce a copy of the signed oath) for any purpose including becoming a citizen of (or confirming citizenship of) or accepting employment in the armed forces or public service of another country qualifies as far as I know. (If in any doubt, you should probably consult a lawyer, preferably a cross-border-qualified immigration lawyer who is in Canada and is a Canadian citizen and doesn’t have allegiance to the US. There are some in Toronto and elsewhere we can steer you toward.)
See related threads on this website, on relinquishment.
I am not a lawyer and this is not legal advice. However the above is consistent from what I’ve heard or read from some lawyers, but contexts and individual circumstances may differ.
Some US border guards have bullied or convinced people to get US passports, claiming they won’t be allowed in next time, when those people had a legitimate claim to a relinquishment. Ignore the border guards; they’re wrong. I personally know someone who has repeatedly crossed the US border on a Canadian passport showing a US birthplace, has been told she’s US and has said “no I’m not” and still crosses and still gets in. She doesn’t have a CLN (I think she should get one, she certainly qualifies, but she refuses, her choice not my advice), they made a notation on their computer, and she still gets in. A lawyer told me of a client who has been cautioned four times and still crosses and still gets in. I think these people ought to get CLNs if they qualify, if for no other reason than to get their Canadian banks off their backs under FATCA, but my point is — whatever you do, do NOT ever apply for a US passport unless you consider yourself a US citizen and want to remain one.
You can always renounce, but that always entails a $450 fee, always puts you on IRS radar when State sends a copy of your CLN to IRS (which they don’t seem to do with relinquishments before 1994 at least in the eight or so cases I’ve been watching for the past year and a half on the Federal Registry lists), and will in their eyes require a form 8854, six years of back returns, and possible exit tax. Pre-2004, certainly pre-1994, relinquishments — don’t even think of contacting IRS. You don’t need to. You sure don’t want to. And if you’re a Canadian citizen and were prior to November 1998 (or during the year for which the claim is made, if later than 1998), Canada Revenue Agency will NOT (under the Canada-US tax treaty as amended in 2007) collect a cent against you for any claim made by the IRS. AFAIK even at the US border they can’t collect without a warrant and without having first contacted you and having told you they think you owe them, in which case you know you’re on the radar and may want to rethink crossing the border if you don’t intend to pay up.
Again, not legal or accounting advice, if in doubt, get professional advice. But that’s what I’d do in your shoes, FWIW.
@Schubert
Thank you for your reply, you definitely sound like you know what you’re talking about… finally someone!!
My Canadian citizenship says “1999” but has no month so I’m guessing I was 16 when I signed this “oath” (something I don’t have; birthday is in January thank goodness). Any suggestions to increase my chances for relinquishment? One of the forms asked if I had any US friends or family, say I did, would that reduce my chance?
Still feeling overwhelmed.
No, having some friends and family in the US is not a problem. What’s really important is that the answers on your 4079 will show that you have more ties to Canada than to the US (and also that your behaviour has been consistent with that of a Non-US citizen).
The decision on whether you terminated your citizenship is based on the balance of probabilities and no one factor is necessarily determinative.
Most US-born people probably have some family and/or friends in the US. It’s kind of hard to hold something like that against someone — whereas at the other extreme, something like voting in US elections after one claims to have relinquished would be a very suspicious red flag.
I want to add that IF you were told you had to get a U.S. passport and IF you were told at the border that you HAD to use it then you can still relinquish.
That was the case with me. When I was at the wicket handing in my relinquishment documents the consulate officer in Toronto had me to wait while she called Washington D.C. to ask specifically about such instances. When she came back to the wicket after speaking with them they told her “It’s still a relinquishment. You are allowed to relinquish” So if you must check “Yes” to the question as to whether or not you traveled on a U.S. passport you just explain to the consulate officer why you did so and you can still relinquish. If they argue with you about it, and I do not think they will, then get them to phone D.C. and ask directly of them about such situations.
Washington is well aware of such instances and still allows you to relinquish. However, if you freely traveled on your U.S. passport without being told you had to do so then that may be another story.
A very important point from Attitucs in the above comment!
Also there’s four or five people, who reported to the Isaac Brock Society, who had relinquished their citizenship, but much later filed taxes out of confusion during that media blitz in 2011. They got CLNs backdated to the date they acquired their Canadian citizenship (as long as 40 years ago) – because they had gotten bad information/were confused when they filed these tax forms.
It comes down the balance of probabilties, with no one factor necessarily being determinative.
But, of course, if one has to date done nothing indicative of US citizenship, don’t start now 🙂
I have absolutely no ties to the US, except a few aunts and uncles. The only thing I can think of is that I performed my expatriating act of getting a citizenship card at the age of 16. However, my parents informed me of my rights and I voluntarily became a Canadian citizen under the impression I would no longer be a US citizen. I do not have a copy of my oath or papers that go along with my citizenship card. I looked online last night at the Canadian immigration and citizenship website but had trouble finding contact information. I could pay 75$ and search through their system, but I am not even sure what I would find! I am still feeling stressed about this entire situation. There are so many controversial policies and comments out there.
ATTENTION TO AM AND TO FEELING LET DOWN and to any other dual-at-birth who has sworn an oath to the Queen on getting a citizenship card:
I’m terribly sorry, but I think I was mistaken on the age 16 bit. At the time I wrote yesterday, that age 16 came from some renunciation references (not relinquishments), I now realize.
After getting a private email query on this point from one of our moderators, today I checked the Cornell U website where the text of the US law on these points is cited here
http://www.law.cornell.edu/uscode/text/8/1481
The relevant reference about ANY oath of allegiance to a foreign country is section 2, which alas in your cases specifically says you have to be 18 or older at the time.
You could always try this route and hope to get a sympathetic vice-consul and that whoever in Washington checks the fine print overlooks this (I recommend trying Toronto consulate BTW they seem a bit more sympathetic than some others most of the time), but be prepared to be turned down and to be told you have to renounce instead. That won’t AFAIK get your name sent to IRS or anyone outside State, because you haven’t at that point legally done anything they’d accept yet, but you’d have lost time and maybe travel expenses in the attempt.
If in doubt about whether it’s worth pursuing this route if your oath was before age 18 (and you haven’t subsequently to 18 sworn any other oaths of allegiance to a non-US country), I urge you to get proper legal advice on that point. I’m not a lawyer, just an informed Canadian (and proudly Canadian-only) citizen whose memory isn’t always bang-on as we’ve just learned.
Anyone reading this thread who did swear an oath of allegiance to a foreign country after the age of 18, should in my opinion think seriously about pursuing the relinquishment course not renunciation.
And further BTW, please carefully check the wording of section 2, which includes not only foreign states “but any political subdivision thereof.” So if you worked for the Government of Ontario or the City of Toronto, for example, and swore an oath of allegiance as part of your employment and can swear this was voluntary and done with the intent to relinquish your US citizenship, that oath (documented by a copy with your signature on it, I hope) should qualify. It doesn’t just have to be Government of Canada or the Canadian Forces or RCMP for this. But, as Pacifica notes above, be darned sure you didn’t subsequently do something contrary to a relinquishment claim, like vote in a US election or apply for some US financial assistance or benefit only available to US citizens. And for your sake, don’t file anything to the IRS unless you’re certain you are a US citizen or have some other reason to file anything to them.
If you have to renounce instead of relinquish, does this mean you need to file taxes?
You are supposed to file taxes. No one knows what will happen if you don’t; except to say that the US cannot collect anything in Canada. The IRS has serious underfunding and other problems. It is doubtful they would be interested in a Canadian living in Canada who may or may not owe them some money. They have enough other work to do.
So because I got my Canadian citizenship before I was 16, I can’t relinquish? This just makes me SO mad. I have NO ties to the US. Does renouncement mean I need to pay taxes?
@ Canadian, feeling let down,
A relinquishing act before age 18 doesn’t look promising to me. Maybe someone else has had experience with this and can shed a different light.
This is what I’ve come up with.
The Dept of State manual says,
“7 FAM 1292 (g). Age limitations in the INA: INA 349(a)(1), INA 349(a)(2) and INA 349(a)(4) contain specific provisions limiting their applicability to a person “having attained the age of eighteen years.” No finding of loss of nationality may be made for these acts committed by a person under the age of eighteen.”
which is also stated in the law itself,
” s. 349(a)(1) obtaining naturalization in a foreign state upon his own application or upon an application filed by a duly authorized agent, after having attained the age of eighteen years;”
There is, however, the possibility for having relinquished if you performed one of these acts at age 18 or over.
“s. 349(a) (2) taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state or a political subdivision thereof, after having attained the age of eighteen years; or
s. 349(a) (3) entering, or serving in, the armed forces of a foreign state if
(A) such armed forces are engaged in hostilities against the United States, or
(B) such persons serve as a commissioned or non-commissioned officer; or
s. 349(a)(4) (A) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years if he has or acquires the nationality of such foreign state; or
(B) accepting, serving in, or performing the duties of any office, post, or employment under the government of a foreign state or a political subdivision thereof, after attaining the age of eighteen years for which office, post, or employment an oath, affirmation, or declaration of allegiance is required;”
http://www.law.cornell.edu/uscode/text/8/1481
@ Canadian, feeling let down,
If a person renounces, they have until June 15th of the following year to wrap things up with IRS. So, if a person renounces in 2014, they have until June 15th, 2015. By that date, they are supposed to have filed the exit tax form and the tax forms for 5 years prior to renunciation (2009-13) and a tax form for the partial year January 1st to the day before they renounced in 2014. One has to certify on the exit tax form that one filed the 5 prior years.
The Consulate/DOS does not care if you are up to date in filing taxes or not. They deal only with the citizenship itself. Citizenship status is not dependent on tax status.
However, according to the Dept of State Foreign Affairs Manual, DOS is supposed to send IRS a copy of each CLN they issue. I’ve no clue if IRS follows up on these CLNs or not, perhaps depends if the fruit is low-hanging or high-hanging, if the person is in the system or not, but I don’t know. Different people make different decisions about what they are going to do based on their own circumstances and risk tolerance — it’s important to read up and think about it and make the decision that you feel most comfortable with.
Whether or not the person files with IRS, the citizenship itself remains terminated and the CLN remains in effect.
@ Canadian, feeling let down,
Further to KalC’s observations, the Canada-US Tax Treaty, s. XXVI(A)(8) sets out that Revenue Canada will not assist the IRS is collecting tax debts if the person was a Canadian citizen at the time the tax debt arose. As well, Minister Flaherty has stated that CRA will not assist IRS in collecting FBAR penalties on anyone, because FBAR isn’t even included in the Treaty.
https://www.fin.gc.ca/treaties-conventions/usa_-eng.asp
The Treaty makes international collection even more of a major production than it might otherwise be. And KalC has also pointed out a lot of common sense business reasons why IRS basically has to choose what battles to pick.
So, as with several aspects of untangling oneself from the US, it comes down to each person deciding which route is most comfortable to them based on their circumstances, risk tolerance, etc.
Once again, I’m just a person caught up in this mess, so it’s not legal advice, just passing on some info and my personal take on things. The important thing is to do a lot of reading and thinking things over before acting. There is a series of Info Sessions coming up in 5 cities in Canada and in London, UK, starting this Saturday in Toronto – there’s a new post about this at the top of the main page. It would be great if you could attend one of them!
Canadian: Remember Canada Revenue Agency does not and will not collect tax liabilities for IRS for any Canadian citizen and will not collect penalties for IRS for any Canadian citizen or resident. In addition, Canadian courts have ruled IRS has no jurisdiction in Canada.
Outraged is in a similar position to yours. She made an informed and conscious decision to become a Canadian citizen when she was 16. That is one of the major reasons why she is not going to a US Consulate to inform them of what she believed was a relinquishing act decades ago.
Some people are asking if they can relinquish based on having a Canadian passport and voting in a Canadian election. Someone e-mailed me about this today and there is discussion regarding this going on at Brock. Unfortunately, no one has a firm answer to that question. The form used for relinquishment raises more questions than it answers.
http://www.state.gov/documents/organization/97025.pdf
http://isaacbrocksociety.ca/2011/12/12/relinquish-dont-renounce-if-you-can/comment-page-10/#comment-1010271
Are you able to attend one of the information session which is being held in Toronto, Kingston, Waterloo, London, Ontario, London, UK or Vancouver?
The Canadian courts will not collect taxes for foreign government
http://uniset.ca/other/cs6/68OR2d379.html
“At p. 723 it was stated that during the course of the action no one questioned the well-established rule that a foreign state is precluded from suing in Canada for taxes due under the law of that foreign state, and that in a foreign judgment there is no merger of the original cause of action.”
At the risk of mis-stating something else, but I think this OK — please note in the reply posts above that Canada Revenue Agency will NOT collect FBAR penalties against anyone, nor will it collect taxes the IRS says are owing against anyone who was a Canadian citizen at the period in question. Please note that Canadian residents who are not Canadian citizens are NOT protected under this treaty umbrella. Please also note that AFAIK CRA will not enforce IRS reporting or filing requirements.
What happens to you if and when you cross the US border, if and when the IRS is aware of you and thinks you owe them something, may be a different story. One factor to consider is how important is it now, or do you think it will be in future, for you to be able to cross into the US without fear of being nabbed for tax liabilities and penalties? As others have mentioned, there are practical matters such as IRS resourcing, priorities, whether they can get a warrant from US Justice Department, etc. but I don’t think I’d want to hang my future on what may or may not be temporary resource or other practical limitations on them.
Also be aware that anyone for whom a warrant has been issued by US authorities could have that warrant exercised against them if they are on an aircraft that for whatever reason has to land on US soil and US authorities decide to have a close look at the passenger list. This may particularly be a concern regarding flights that aren’t scheduled to land in the US but still fly over US airspace or near enough to the border that in an emergency the nearest airport or hospital is on US soil.
In other words, yes it may be possible to “fly under the radar” but that may be at the cost of certain worries and restrictions for the rest of your life. Are you prepared for that? I’m not saying you should or shouldn’t be; I’m only pointing out this is something you need to reflect on carefully from your own circumstances and perspective.
Finally, and I can’t repeat this strongly or often enough. Canada is supposed to be a sovereign country. Our Charter of Rights and Freedoms is supposed to protect every Canadian (citizen or not; the word citizen doesn’t appear anywhere in that Charter) of whatever ethnic or national origin. There are no second-class citizens in Canada under the law. All Members of Parliament are elected to represent all of their constituents, not just those who are affiliated with their particular political parties. You have a right to write to your MP and express your concerns about what a foreign government or a Canadian financial institution is trying to do to you, you have a right to expect a reply and some attention to that concern, and if you don’t get either you have a right to vote accordingly in the next election and to contribute money to political parties who have taken clear stands on these issues.
For your information, the Green Party of Canada has an excellent policy position on FATCA on their website. The NDP National Revenue critic, Tom Mulcair himself, and the whole BC caucus of the NDP back in 2011 have written letters either to Flaherty or to individual Canadians as well making very forthright statements about protecting Canadian citizens. These materials have been posted here and at the Brock website. Flaherty himself has repeated the protections mentioned above under the tax treaty, in writing, repeatedly, and various Tory MPs have repeated or copied these materials to constituents.
It doesn’t hurt to keep pressuring our politicians on this. Under current law, and absent an Intergovernmental Agreement between the US and Canada re FATCA (which Flaherty has been secretly negotiating but we’re not sure what exactly is under discussion, though it’s obvious from the time this has taken there are some “sticking points”), Canadian financial institutions cannot under Canadian law close your account or provide your private financial information to the tax agency of a foreign country. So keep the political pressure up, because IMO Parliament and possibly the courts is where this issue will get decided.
@ feeling let down
I am in a similar situation as you. I was born in the USA to a Canadian parent and moved to Canada at age 3 months. I grew up in Canada and have only lived and worked in Canada as an adult. I have never acted as a US citizen in any way (no US voting, no US passport, no filing of US tax returns, no benefits from any US gov’t or social program etc.) I have only lived my life as a Canadian and therefore find it outrageous that the US would consider me someone who should owe them any money. My father did register me as a Canadian citizen born abroad at age 3 months but those certificates are obsolete now.
Canada clarified its citizenship rules in 2009 and both of us are now considered Canadian citizens from birth (you can verify this on the Gov’t of Canada website) due to us having a Canadian parent(s) when we were born abroad. The citizenship cards were a convenient way to document one’s Canadian citizenship (ex. at customs, airports etc.) before passports became necessary to cross the US border. I got my card in 2000 (not 2002 as I mistakenly wrote in an Isaac Brock comment) simply because it was easier than carrying around the old paper born abroad certificate.
@Schubert and Pacifica777 and Blaze
I do not remember any oath when filling out the paperwork for the citizenship card but maybe I signed one and don’t remember. I will take your advice and investigate getting my file from the Gov’t of Canada website. As feeling let down noted it does cost $75 for an application for a search of citizenship records. I still have the paper that came with my card that has the file number and application ID number (and the certificate number which of course is also on the card).
Even if I cannot find that I signed an oath of allegiance, do you think that just the process of getting the card satisfies the wording (from the Cornell law website) “or making an affirmation or other formal declaration of allegiance to a foreign state” – ie. would getting the card satisfy the criteria for an act of expatriation (so that I could obtain a CLN)? I should get a legal opinion on this (and will try to attend one of the info sessions).
The Canadian protections from the IRS collecting are comforting – but the thought of getting a bill from the IRS in the mail and then the IRS possibly trying to pursue collecting through the Canadian court system would be stressful no doubt. I am hoping that our government will not compromise our banking and privacy (ex. PIPEDA) laws and of course not let our Charter rights be violated (as per Peter Hoggs letter). If these hold then the USG’s fishing expedition for US persons through our banks will not succeed. I have written to my MP about this and am planning to write to Jim Flaherty.
Let’s also hope that worldwide and internal US reaction to FATCA (with so many Americans around the world experiencing hardship due to it) leads to its demise before it can potentially hurt us in Canada. However it seems that the USG, Dept of Treasury & IRS have put so much expense and effort into it that they are not going to give up the battle easily. On a good note, there was a recent article in the Globe & Mail about the US budget – while many parts of the USG had their funding increased the IRS got a funding cut – this came from Congress and Obama was expected to sign it.
@ Canadian, feeling let down
You wrote: “So because I got my Canadian citizenship before I was 16, I can’t relinquish? This just makes me SO mad. I have NO ties to the US. Does renouncement mean I need to pay taxes?”
I don’t know about your precise circumstances, but I also became a Canadian citizen when I was just 16. However, I still have a relinquishment case owing to the particular INA statutes that were in effect at that time (1975) and which remained so until significant amendments were made in 1986. Depending on your age, you may also fall into this category and might be able to argue a similar case.
Here’s how it worked. If you were 21 or younger at the time of obtaining your Canadian citizenship, the U.S. Government would essentially hold your U.S. citizenship in trust until you reached the age of 25. However, if you did not move back to the U.S. by that age and establish permanent residence then your U.S. citizenship would automatically lapse for good (it would be good, all right – we just didn’t realize it back then). Here is the relevant portion of INA 349, as it was written in 1952 and still in force at the time (for me, 1984):
“INA 349 – 66 STAT.] PUBLIC LAW 414 – JUNE 27, 1952
Chapter 3 – Loss of Nationality
LOSS OF NATIONALITY BY NATIVE-BORN OR NATURALIZED CITIZEN
SEC. 349. (a) From and after the effective date of this Act a person who is a national of the United States whether by birth or naturalization, shall lose his nationality by-
(1) obtaining naturalization in a foreign state upon his own application, upon an application filed in his behalf by a parent, guardian, or duly authorized agent, or through the naturalization of a parent having legal custody of such person: Provided, That nationality shall not be lost by any person under this section as the result of the naturalization of a parent or parents while such person is under the age of twenty-one years, or as the result of a naturalization obtained on behalf of a person under twenty-one years of age by a parent, guardian, or duly authorized agent, unless such person shall fail to enter the United States to establish a permanent residence prior to his twenty-fifth birthday.”
As I mentioned, these statutes were amended in 1986 to remove all references to an age-25 cutoff. Therefore, you would currently have to be about 53 or older in order to take advantage of this contemporary statute, and you might also have to prove that you never did take up permanent residence in the U.S. before your 25th birthday. In my case, it would be easy to prove that I was still a full-time university student living in Toronto on my 25th birthday in 1984.
Even if this information doesn’t apply to you, it is still a good example of just how complex it can be to determine your individual situation and options. It is very much about where you are positioned on the grand timeline of INA and IRS statutes and amendments over many years.
All the best to you in your own journey.
Good points Shubert. I relinquished rather than renounced due to wanting to make my way smoother possibly at the border. I do have to travel there approximately once per year. A relinquishment may not be looked upon as harshly should I meet up with an officer having a bad day at the border.
BUT if you have no reason to go there ever again and even if you do you may want to go the route of renouncement. I just felt more comfortable given the situation to do things as I did.
And speaking of that WHERE is my CLN!? My dad is going down hill now and I want to go down there. I skipped Christmas thinking I’d go in the spring since I didn’t have my CLN. Well, I still do not have it. One member of this forum said it took seven months for her son’s to arrive. SEVEN months. This is unacceptable and something to think about when you relinquish. You do not get a receipt saying you paid and have renounced. You get nothing. I suppose you are in a computer somewhere but, that’s little comfort after you have paid for airfare. In that case renouncing is better. At least you have something to show.
@ Mr. A.
Check out the new post by Schubert. He just got some positive news from a friend in a situation that sounds similar to yours. http://maplesandbox.ca/2014/possible-relinquishment-route-for-cln-for-some-duals-at-birth-in-canada/
Pacifica beat me to the punch, was I just about to post a correction on this yes-16, no-16 back and forth. It’s not certain, but we have a respondent on my post over at Brock who says he asked by email to a consulate whether his age-16 oath of allegiance to get a citizenship card would qualify for a relinquishment. He was told, come in for an interview, we can’t make a determination by email. He wasn’t told “no.” That may or may not mean “yes” when he goes, but they could have said “no,” and they didn’t. I told him it’s worth a shot; see the discussion on the other website for more.
http://isaacbrocksociety.ca/2014/01/21/possible-relinquishment-route-for-cln-for-some-duals-at-birth-in-canada/comment-page-1/#comment-1015256
Thank you both for your help with this. I still wonder if the process of applying for and getting the Canadian citizenship card qualifies as an act of expatriation even if no oath of allegiance was signed, ie “…or making an
affirmation or other formal declaration of allegiance to a foreign state”
One could argue that one was affirming their allegiance to Canada simply by getting the card. I will apply for my Canadian Citizenship file and post what it shows when I hopefully get my file.
I was wondering that too.. When I got my citizenship back in 2006 I do not remember what I signed, but I do know that at the ceremony as a group we all had to stand and pledge our allegiance to the queen.. Which brings up one of the questions on the current IRS program they are offering for people who have been out of the states since 2009.. One of the questions is were you aware you were a US citizen.. Wondering if in that situation We should be answering No… As per our pledge to Canada?
@Mr. A. I think your interpretation and argument is worth a try, especially if you go to the consulate in Toronto and if you were to bring with you a signed affidavit swearing that by getting that card you voluntarily were affirming that you considered yourself a Canadian and only a Canadian and that you did so intending to relinquish any claim you had to US citizenship. Especially if everything you swear to on Form 4079 points to never having attempted to exercise US citizenship after getting the card, I think you have a case. But then I’m not a US vice consul so there are no guarantees. Worse case, they say no and then you have to renounce. But I think it would definitely be worth a shot.
@ Carrida. If you swear that you became a Canadian citizen voluntarily (I doubt there was a Mountie holding a gun to your head …) and did so with the intention of relinquishing your US citizenship and holding only one citizenship (Canadian), and all else on your form 4079 points to behaviour thereafter consistent with such an intention, I think you’re fine. Not sure about the pre-2009 bit and how that would play out, you probably should get (Canadian cross-border) legal advice on that. I have no idea.
BTW a truthful statement that I know several people swore to in affidavits in getting a relinquishment CLN, would be along the lines (if it’s true, which it is I think for almost everyone) “at the time I became Canadian and relinquished my US citizenship, I was not aware of any need formally to notify the US government of this fact. If I had been aware at the time, I would have notified the State Department at the time. I wasn’t, but I am now, and I am now informing you.” That nails the point. The fact is, until the last two years when these websites began, I don’t know of anyone (including me) who was aware of any need to inform State of relinquishment, and in fact and in US law (see the Michael J. Miller article in May 2013 International Tax Journal references in another thread discussion) the ONLY form of relinquishment which the law passed by Congress requires going to a US consular officer, is renunciation itself. Obviously you now need to inform them to get a CLN to get the banks and the border patrol off your back, but that’s just post-hoc confirmation of the fact of your relinquishment years ago. It doesn’t nullify your relinquishment, and IRS cannot legally claim that your date of relinquishment “for tax purposes” was when you told State, not when you did it, if it was before June 3, 2004 (which is when that additional law passed by Congress took effect, they can’t enforce it ex post facto and they damn well know this, as reflected in the structure for IRS Form 8854 and the instructions for it as issued a week or two ago for 2013).
How that 2006 vs 2004 vs 2009 business plays out re your tax-filing from an IRS perspective, I can’t comment, maybe someone else can. I know nothing about that.
I hope the above helps (and it’s not legal advice; I’m not a lawyer).
Oath of Citizenship
The Oath of Citizenship / Le serment de citoyenneté
Listen to this chapter
I swear (or affirm)
That I will be faithful
And bear true allegiance
To Her Majesty Queen Elizabeth the Second
Queen of Canada
Her Heirs and Successors
And that I will faithfully observe
The laws of Canada
And fulfil my duties as a Canadian citizen.
Je jure (ou j’affirme solennellement)
Que je serai fidèle
Et porterai sincère allégeance
à Sa Majesté la Reine Elizabeth Deux
Reine du Canada
À ses héritiers et successeurs
Que j’observerai fidèlement les lois du Canada
Et que je remplirai loyalement mes obligations
de citoyen canadien.
Also from CIC website…
Prepare for the citizenship ceremony
The citizenship ceremony is the final step to becoming a Canadian citizen. You will take the Oath of Citizenship and get your citizenship certificate there.
We will send you a notice telling you to attend a ceremony and take the oath, if you meet all of the conditions to:
become a Canadian citizen, or
get your Canadian citizenship back.
The notice will tell you when and where the ceremony will be held.
As a new citizen, you must wait at least two business days after your ceremony before you can apply for services, such as a passport.
@Schubert
I am in the process of applying for my Canadian citizenship file, which will likely take a while to arrive. I agree that even without an oath of allegiance (and I will be surprised if I did sign one) that the argument of affirmation of allegiance to Canada is worth a try. I have never acted as a US citizen in any way, either before or since getting the card. You know that I am a dual from birth who has only lived in Canada as a Canadian. Toronto is where I would go.
If they say no to this argument for relinquishment (in 2000 in my case), would it not be better to walk out than to renounce? I know that renouncing means becoming tax compliant which is the last thing I want to do as I am not in the system in any way. I know that Pacifica has said that DOS does not care about your IRS/tax status (they only deal with citizenship status) but doesn’t renouncing mean that your CLN will be sent to the IRS? This will make them aware of my existence and may make me look like a tax evader as I have not filed tax returns & FBAR’s. As I have no SSN, TIN etc. they may ignore my CLN but then again what if they don’t. I am aware that they can’t collect from me but I would prefer that they never know about me.
On the other hand it would be nice to get a CLN in case I need it for protection from the banks. It hasn’t been determined yet if I really need a CLN depending what the Canadian government does re. upholding our Charter, privacy & banking laws but I would like to start planning possible courses of action depending on how events develop (which of course in my case include doing nothing).
Please tell me if you think that renouncing is a good idea if you have no intention of following it up with the tax return & FBAR filing obligations. Getting a CLN this way would likely work for our banks just the same so the IRS would never potentially get my account info. etc. However it could leave me as a non-compliant tax evader (would I be a “fugitive from US justice”?) with a border computer red flag. I can live with never entering US soil again. It may be better to stay off their radar for now than getting a CLN through renouncing.
Pacifica & KalC – if you see this I would appreciate your opinions too, although your recent comments suggest that no one really knows what happens if someone renounces and then never becomes tax compliant.
Thanks again Schubert.
Thanks for the reply! I think I will be ok. I became canadian PR in 2001 and a Citizen in 2006. I never renewed my US passport and I have not voted in any US elections after 2000. I did cross into the US once for 2 days in 2011 using my canadian enhanced drivers license and also crossed in 2013 for 2 days using my canadian passport ( which states a US birthplace)
I own no property in the US, no business dealings, all my family has passed, and I keep no contact with us friends, I have also not filed US tax since my canadian citizenship. In my mind I relinquished US citizenship upon getting my canadian and swearing my oath. I did not know of any formal requirement to get a CLN.
I think it’s 50:50. I really do. Depends a bit on your age and how long this will go on. In your mind, you are not a US citizen so you have no desire/need/obligation to file anything. I firmly believe you will be fine without a CLN. Don’t have an account over 1M. That’s who they are really interested in.
I hope your right! I’m in my 50’s and most defiantly do not have anywhere close to a mil in the bank! Who knows what they are looking for and hopefully even IF identified as a “US person” banks will accept a Canadian passport or citizenship card in lieu. It seems much undue hassle and expense to have to convince some official of my “intent” of something I did years ago just to get an “official” piece of paper. I really feel for you that were born duel… This is sure a headache EH!
Mr. A.
For what it’s worth, it’s my impression (based on watching for the names of around 25 people I know with CLNs, on the IRS Federal Register quarterly reports) that if you renounce your citizenship, it is very likely that State Department will forward a copy of your CLN to IRS. US law requires them to do this, and requires IRS to publish on Federal Register the names on all CLNs they received from State in the previous quarter (three month period). They only publish the name, not the birth date or place of residence at the time the CLN was issued, but that information is on the CLN that was copied to them, so they’ll know it, if they get a copy of your CLN.
Some people who renounce have reported on this website that their names have never shown up on the list, but all but one of the renunciants whose real names I know have been listed. So it’s rather haphazard, as far as most of us can tell. Not one of the eight or so folks I know who got CLNs based on pre-2004 relinquishments have shown up on the lists however (some got their CLNs more than 18 months ago, so time isn’t the issue).
I am assuming that if the CLN isn’t copied to IRS, IRS won’t know about it, but that is an assumption that might be wrong. I don’t know for certain that it is correct.
So if you renounce (rather than having relinquished before 2004) but don’t file back taxes and a form 8854, I think there is a serious risk that they’d be looking for you at the US border, once they get their act together. Be aware however that if you are a Canadian citizen and were going back at least six years (tax liabilities incurred before you were a Canadian citizen might be collectable but not if you were Canadian citizen from before November 1998 under a 2007 treaty amendment), Canada Revenue Agency won’t be collecting anything for IRS against you, not tax payments, not penalties, and they don’t enforce US reporting requirements. Both CRA and Jim Flaherty have confirmed this, in writing; those protections are in the current Canada-US Tax Treaty. I very much doubt this government has any interest in throwing those treaty protections out the window. I don’t think any responsible sovereign government wants to be a tax-collector for the Americans. Certainly no government I’d ever vote for.
What happens down the road at the banks in Canada, if Canada signs an IGA (and depending on what’s in the IGA) — who knows? At minimum, expect in that case that 30% of any US-source income (that could include a lot of mutual funds if you have them, unless they are absolutely 100% non-US in terms of content) may be withheld from you and sent to the IRS. Canadian-source income they can’t touch AFAIK. US-source income they can essentially seize at source. That could include any property or inheritance you might have or get from the US.
That’s my understanding of the situation, but I’m not a lawyer nor accountant, so don’t take my comments as Truth. They’re just my best guess at the moment.
If you weren’t at yesterday’s information session in Toronto (see the post pinned to the home page of this website), I urge you to try to get to one of the other sessions and ask your questions of the lawyer who’s there, though he only offers general information and can’t provide individual counsel at these sessions.
@ Mr. A.
Re: “I know that Pacifica has said that DOS does not care about your IRS/tax status (they only deal with citizenship status) but doesn’t renouncing mean that your CLN will be sent to the IRS?”
I should have been more clear — that they don’t care in terms of doing their job, which is taking care of the citizenship itself, and the citizenship (or loss of it) is not dependent on tax status. [The question on the 4079 about do you file taxes has to do with determining if one has been behaving as a US citizen, which is relevant if one is claiming having relinquished.]
You’re correct about the CLNs being sent to IRS. According to the Dept of State Foreign Affairs Manual, 7 FAM 1243(b), DOS is supposed to send IRS a copy of each CLN they issue under s. 349(a)(1), (2), (3), (4) and (5). http://www.state.gov/documents/organization/113465.pdf
I’ve no clue if IRS follows up on these CLNs or not, perhaps depends if the fruit is low-hanging or high-hanging.
Whether or not the person ever files with IRS, the citizenship itself remains terminated and the CLN remains in effect.
Re: “Pacifica & KalC – if you see this I would appreciate your opinions too, although your recent comments suggest that no one really knows what happens if someone renounces and then never becomes tax compliant.”
I really don’t know. The only thing I know for sure is that the citizenship remains terminated, but IRS is a mystery to me. I wish I could shed some light because it’s important, but it would just be my personal speculation.
For what it’s worth to all above, I’ll describe what I decided my course of action was going to be going forward. I became a Canadian on December 14, 2012. Immediately after returning home from the ceremony, I emailed the US consulate in Vancouver, told them that I had become a Canadian citizen with the intent of losing my US citizenship and requested an appointment to document that relinquishment and apply for a CLN. Their reply was “take a number and get in line; CLN appointments are in high demand and we don’t know when one might be available”. I made sure I saved copies of that correspondence.
Eventually I lost patience with their obstructionism because no appointment ever became available. (Apparently, very recently they have changed their procedure.) In the meanwhile, I had gotten a good look at Form 8854 and resolved to never file one of those abominations. I mean, really, why why give the bastards a shopping list of my wholly Canadian assets?
So now, I’m no longer a US citizen; I don’t give a damn what they say. Because I’m not a US citizen, I’m not going to act like one. No tax returns, no 8938, no FBARs, and certainly no 8854 exit tax form for assets that were never in the US in the first place. I attempted to return my US passport but they said “don’t do that; we’ll just send it back to you”. It’s useless to me; I can’t use it to enter the US because I’m not a US citizen. So it just sits in the bottom of a dresser drawer, never to see the light of day again.
I’m betting on a few things:
(1) No US assets, so no leverage on me.
(2) The protection of the Canadian government.
(3) The IRS has so much on it’s plate with FATCA they they won’t know whether they’re coming or going for years.
(4) I’m low enough income and low enough net worth that even if they do get around to looking into my case, they’ll figure I’m not worth the effort . (If no CLN ever winds up on an IRS agent’s desk, how would I ever even come to their attention?)
(5) Although I believe it’s highly unlikely I’d be banned, I’m fully prepared to never set foot ion the US again. (I’d enjoy telling all my US friends and relatives what a wretched government they’ve got).
(6) Eventually FATCA and this whole offshore jihad is going to blow up in their faces and we who have resisted the insanity will be on the right side of history. Kind of like Vietnam back in the 60’s and 70’s.
So, over the course of a few years, I went from totally oblivious, to scared to death, to trying my best to become compliant, to realizing that wasn’t possible and have a life at the same time, to mad as hell, I’m not going to take it anymore.
Maz..you’ve pretty much summed up my feelings! I applaude you!
Schubert, Pacifica, maz57,
Thank you so much for all your help – all the helpful information that I have learned on these two sites have been so important in guiding me through this sea of uncertainty, and the journey may have a long way to go as we all know. No I couldn’t make the Toronto session (very busy with work & family) but I will try to get to one of the others. I am very inspired by the way people pull together in the face of injustice, which stirs the human spirit like nothing else.
a)
“Where account holder information unambiguously indicates a
U.S.
place of birth
, the Reporting United Kingdom Financial Institution
obtains or has previously reviewed and maintains a record of:
(1)
a self-certification that the account holder is neither a U.S.
citizen nor a U.S. resident for ta
x purposes (which may be on an
IRS Form W-8 or other similar agreed form);
(2)
a non-U.S. passport or other gov
ernment-issued identification
evidencing the account holder’s citizenship or nationality in a
country other than the United States;
and
(3)
a copy of the account holder’s Certificate of Loss of Nationality
of the United States or a reasonable explanation of:
(a)
the reason the account holder does not have such a
certificate despite renoun
cing U.S. citizenship;
or
(b)
the reason the account holder did not obtain U.S.
citizenship at birth.
from UK Facta
http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-UK-9-12-2012.pdf
You need more then CLN
You have to do a 8854 tax compliant for W8 to be true.But of course you a W8 is an IRS document. Does the Canadian government protect us from lying on an IRS document especially when we only have Canadian assets.
maz
You probably do not even enough asset for them to bother with you in a court of law. There is also the revenue rule. The only thing is that 1995 Canada US tax treaty allows the USA collect on taxes owed before you became a Canadian, The Liberal government approved it. Pierre Trudeau never complained about it unlike Meech Lake. You may want to check on the Parliamentary record if NDP supported it. I think there were 2 conservatives at that time.
I can truly appreciate Maz and many others have decided to cut ties to the US including citizenship and filing US returns/FBARs etc. Although I’m also a proud Canadian citizen I still wish to travel to and from the US.
I came to Canada in 1970 and have spent my adult life in BC. I elected to start filing US returns in the 1980’s because of high frequency business travel to the US. I still file US tax returns, including this year’s FBAR submitted the other day electronically (the only way you can do so now) and for the first time this year 8938’s. I even got my US passport renewed recently. So, I’m basically in compliance although still wondering if the IRS will eventually come knocking on the door for me to help pay down the colossal mountain of US debt.
So, here’s my situation. I meet regularly with about 7 other US expats at our local Tim Hortons once a month. About half of us file US returns/FBARs. The rest don’t and don’t intend to do so. LIke me, they have been in Canada for 30 years plus. The topic of FATCA discussed this week and the discussion was somewhat tense.
Those of us who file US returns are mostly retired and have no US tax payable. We are way below the 97K US foreign tax exemption. Our RRSP’s are modest and all have taken steps to have separate bank accounts from our Canadian spouses. We don’t hear from the IRS, either. For a number of years none of us have received an acknowledgment of having filed 1040 paper returns even when submitted by courier to Austin TX. I do get an electronic acknowledgment for having filed FBAR’s. Is this normal?
Finally, although we heard the CBC news story about the high profile case of the disabled young man from Calgary and his mother being harassed by the IRS for his disability RDSP (not recognized by the IRS) do we actually know how active the IRS is in chasing “minnows” in Canada.
You’re still a US citizen. Whether you have US income or not is irrelevant because, even without FATCA, US citizens are liable to file US tax returns on worldwide income regardless of where they live in the world.
@Ned: To most of us it’s a foreign law. We long ago relinquished US citizenshship “permanently and irrevocably”–at least that’s what the US Consulate said. So, I guess we shouldn’t have believed them.
Others were merely born in US to Canadian parents. Under the law at the time when they became adults, they did not claim their US citizenship and so were not considered US citizens.
That should be the end of this story. The US calls us criminals but what they are doing is truly criminal–but they hide it under the guise of a law–which to most of us is a foreign law.
Canada Revenue Agency does not and will not collect tax liability for IRS for any Canadian citizen. The Minister of National Revenue reconfirmed that this month. IRS cannot collect in Canadian courts either.
US, but refuses to fill out the FATCA-required IRS forms, the bank is required to report that person as a ‘recalcitrant account holder’ and must withhold 30% of US source
I do not think that is correct for the Canadian FATCA.
I did drop all US holding and I am just some who threw away a green card 35 years ago. I even did an I-407 one I once cross border. It lost to but not on US records. I even request from revenue Canad that I have been a resident for past 30 year realy do not need it now.
All this FATCA and US citizenship taxation is so wrong. Nobody in the US sees it and do nothing about? This is unjust. We want justice.
@EagleandWings,
Time is of the essence, call your MP and make an appointment to see him/her. Bring him/her a copy of the FATCA fact sheet. Many of our MPs have never even heard of FATCA, and of those that have, most don’t understand what it is and are swallowing the party line, that it is a ‘good deal for Canada’.
@ Schubert
On Jan. 26 you wrote:
RS cannot legally claim that your date of relinquishment “for tax purposes” was when you told State, not when you did it, if it was before June 3, 2004 (which is when that additional law passed by Congress took effect, they can’t enforce it ex post facto and they damn well know this, as reflected in the structure for IRS Form 8854 and the instructions for it as issued a week or two ago for 2013).
I am curious as to what, if anything, you see in the 2013 instructions that differs from previous instructions. I read these things and get a throbbing headache trying to decipher what they are saying.
We’ve been asked to post an anecdotal letter on behalf of Dual Senior who would like comments on it, as the intent is to send it Canadian & US newspapers, TV stations and US congress persons, maybe even the US president. I applaud Dual Senior who wants to get out there and scream, rather than sitting at home moaning!
Here’s the letter:
Canadian Government is Allowing IRS to Bankrupt Canadian Seniors
(Hey Ottawa your throwing granny under the bus)
There are many with dual Canadian/US citizenship and people unaware the US considers them US citizens living in Canada. God help you if you have an American parent or happen to have been born there and left when you were three minutes old. The IRS considers you an American for tax purposes. With the enactment of FATCA and the requirement of FBAR filings many of these law abiding Canadian citizens could be thrown into bankruptcy. If they don’t comply they could be denied entry into the US, though not happening yet my fear is it is on the horizon. Sitting in that line up in Lewiston you will wonder….will this time be OK? Will I have to turn around and drive home? In my situation until recently I had aging parents in a US nursing home. I HAD to get there. Many have family in the US and also enjoy vacationing there. Canadian banks are now required to identify these people and report them to the IRS. Some banks in other countries are closing US accounts and certainly not opening any new accounts to this large subset of people due to the administrative costs and the toxicity of these accounts. The banks will be severely penalized if they have unreported US citizens as clients. Will Canada follow? (Sure hope there are folks out there way smarter than I watching this).
I am sure there are many out there finding themselves in situations similar to mine. Here is my story:
I am a senior, have lived in Canada since 1976. I became a dual citizen in 1983. Both of my children were born and raised here, I am Canadian. Although I was aware of needing to file US taxes (the US is one of two countries in the world that taxes its citizens world wide, the other being the terrorist country of Eritrea) my income was below the need for filing. Even if my income had been more substantial the cost of hiring an internationally savvy accountant to prepare the required returns is in the $800-$1,000 range, even if no taxes are owed due to foreign tax credits.
Like many ordinary folk I don’t read financial magazines, don’t spend my leisure hours reading tax treaties and live an ordinary law abiding life of a retiree; knitting, tending my garden, walking the dog and shaking my head at Rob Ford. (Or currently trying to keep the snow off of the front walk). I live frugally on a modest monthly RRIF withdrawal and CPP.
I have a very small TFSA account, a checking/savings account and a RRIF. Under the IRS FBAR ruling, which I just found out existed, I was/am required to file forms to the IRS for each account for the past eight years. The Canadian government is boasting that they have negotiated with the US that TSFAs and RRSPs will not be taxed by the US however a US tax return must be filed, along with incurring the accounting fees, requesting a deferment in paying taxes on these accounts until they are withdrawn. Then you must file a 1040NR. FBAR forms will also be and have been required for these accounts.
The penalty for not having filed these forms, even if no taxes are owed, is $10,000 per form per year for I believe back eight years. With my three accounts requiring FBARs that would be (3 x $10,000) x 8 years = $240,000 in penalties for accounts that I do not owe taxes on. There is also a penalty for not checking a box on the yearly tax IRS tax return for deferring RRSP/TFSA payments. This means no matter what your income is you have to file US tax returns and pay the hefty accounting fees just to check that box and if you are unable, file your FBARs.
It seems the best option is to just quietly file all the required back forms (I’ve heard there are accountants out there that will do it for around $2,000) then just sit back and hope for the best. Of course now I am “identified” by the IRS and have not paid the penalties. What I am left with is hoping that the IRS and DHS haven’t linked their computers YET. And when they do what does that actually mean? Just leaves ya with a great feeling huh. Got that holiday all paid for and can’t get on the plane? If any of you are considering the voluntary disclosure route do your homework. This can end up being a nightmare.
There is a popular term for people finding themselves in this situation; we are the “minnows”. The low hanging fruit the IRS can “get” with minimal effort. The whales, as the hedge fund, wealthy tax evaders are referred to are more difficult to catch. They have fancy lawyers and accountants and have their cash under a coral reef in the Cayman Islands. We are a good ROI.
I understand my problem is with the IRS (don’t worry I am also yelling at them but guess what….they don’t care) but our government is not acknowledging that this problem exists and is not helping us at the intergovernmental level. More importantly they are now actively reporting the existence of these accounts to the IRS so they can come after us. The Canadian government can not collect these taxes nor penalize us yet they are exposing us to harsh penalties if we decide to ever step one foot into the US. They are aiding and abetting in making us international criminals. There is the chance we will end up on Canadian welfare and in Ontario Housing as an unintended consequence if we must become compliant. The government has a much larger voice than mine for sure. It would be beneficial to them to not allow the US to send us into bankruptcy.
Interestingly you can’t even renounce/relinquish your US citizenship without becoming tax compliant unless you want to be deemed a “covered expatriate”. What that will mean in the future I have no idea but me thinks it t’ain’t good. If you are one of the lucky ones that never had a US passport or did not vote after you became Canadian you will have an easier time relinquishing. (Read up on renouncing versus relinquishing, there is a $450 dollar difference). Oh, one more little thing….the US has to approve your renouncement, you are now identified to them and they gotcha. What if Uncle Sam decides not to let you go?
Many of us have family in the US, like to holiday there during the cold Canadian winters. Seems the choice is bankruptcy or never being able to visit your grandchildren or aging parents……..Thanks.
Americans somehow consider themselves exceptional….yes, they are exceptionally cruel and the Canadian government is not protecting us. This has become a human rights violation.
I would like to remain anonymous as I fear the IRS will come knocking at my door any minute. (Yes, they are making me paranoid. The Canadian government has caved thus far, what’s to stop them from caving a wee bit more.)
Please tell Granny her letter is excellent and needs to be distributed far and wide. Don’t forget CARP which is described as: “a national, non-partisan, non-profit organization committed to a ‘New Vision of Aging for Canada’ promoting social change that will bring financial security, equitable access to health care and freedom from discrimination.” Here are email addresses for two CARP contacts.
Michael Nicin, Director of Carp: m.nicin@carp.ca
Sarah Park, Policy Researcher & Coordinator at CARP: s.park@carp.ca
@WhiteKat, I’m hoping she will check out the comments herself, she’s registered with us. Thanks for tip on CARP, it’s a good one. And, isn’t it amazing how eloquent we can be when we are so frustrated, outraged, and downright angry!
Yes, the words just flow when you have the passion behind you!
@Dual Senior: I hope you’re letting your MP know how you feel–especially if he or she is Conservative.
The proposed legislation to enable FATCA will have that law supersede any Canadian laws that are inconsistent with that law.
I don’t think IRS will ever come knocking on your door. I don’t think they have the resources or interest in doing that. I don’t think they would be allowed to do that in Canada.
However, two weeks ago, I believed Canada would never consider allowing a foreign law to override long-standing Canadian banking, privacy and human rights laws. Then the IGA was announced, along with proposed legislation to override fundamental rights under Canadian laws. I clearly was wrong about that.
We have been betrayed by both our country of citizenship and choice (Canada) and our country of birth (United States).
I hope others here will visit Isaac Brock and read the posts about and correspondence with CARP after CARP’s mealy-mouthed announcement that the IGA our government of Canada negotiated with the US was a good deal (or at least that’s the way I read it). They touted their considerable lobbying regarding FATCA. Reading CARP newsletters, not receiving CARP communication to my comments and questions, I really don’t think it was ever highlighted as other things are. I hope they see FATCA combined with citizenship-based taxation in a new light, especially after White-Kat’s last correspondence with them, telling it like it really is!
I just put this comment on Isaac Brock as well. It is something I think about each and every day — those who have NO financial resources / NO financial and tax literacy.
quote
On another note, it preys on my mind every single day the number of people this round-up of US Persons will affect who DO NOT have financial resources for their own lives that they think is unaffected by this, who besides having very little in the way of finances, have very little in the way of financial / tax (whatever the country) literacy. There have to be more than a fair share of these individuals / families out there. One has told me she is too poor for this to affect her. So, will that be true? You can’t get blood from a stone so these people should not worry about any of this? What will be their consequences; what will happen to the lives of these families who for whatever reason just don’t have money to get US legal / accounting advice and certainly do not have the expertise to handle it themselves? I don’t want to scare the bejesus out of them. I can very well put myself into their shoes: there but for the grace of god could have gone I — much of my life a single parent with two children, one with developmental disability as well as concurrent medical problems (and me with my own medical issues). Believe me, I know the lucky breaks I’ve had to be able to be a contributing member of Canadian society (along with some very hard work and planning) and I thank all that is holy, that my path brought me to Canada — I would choose this as my country of citizenship over and over again. Had I stayed in the US, I am convinced my circumstances would have rendered me a ‘welfare mom’ with two small children to raise. Do not other people here think that this, aside from our problems, could be huge in the number so affected — and damn ugly?
unquote
OK, now I am going and try to post myself. YIKES! Obviously I have just found out about all of this FATCA stuff and still in the OH MY GOD phase. I am so angry I could chew nails. Can I impose on all of you again to read the letter I have composed for US consumption. Much is the same as my Canadian letter so I hope not to bore you but I have made additions directed at the US. I need to know where I am misinformed, overly hysterical or have left anything out. I am retired and have LOTS of time on my hands. I will be going on an email binge just to make myself feel better. US congress watch out…here comes granny! (Anyone know how to do that robo email stuff)?
Here is my second letter:
US Government Destroying Lives of Seniors Abroad
There are many with dual US citizenship and people unaware the US considers them US citizens living in abroad. God help you if you have an American parent or happen to have been born there and left when you were three minutes old. The IRS considers you an American for tax purposes. With the enactment of FATCA and the requirement of FBAR filings many of these law-abiding citizens could be thrown into bankruptcy. If they don’t comply they could be denied entry into the US, though not happening yet my fear is it is on the horizon. Sitting in that line up at the bridge you will wonder….will this time be OK? Will I have to turn around and drive home? That holiday I’ve already paid for….will they let me on the plane? My mother is ill, my grandchild was just born…..on and on goes the very real horrors I can make myself ill thinking about. When I really get myself into a frenzy I envision myself in San Quentin or Attica….do they have a special ward for grannies?
In my situation, until recently, I had aging parents in a US nursing home. I HAD to get there. Hopefully my son living in the US will bless me with grandchildren soon. Oddly, I hope to be able to visit them. Many have family in the US and also enjoy vacationing there. Banks are now required to identify these people and report them to the IRS. Many banks world wide are closing US accounts and certainly not opening any new accounts to this large subset of people due to the administrative costs and the toxicity of these accounts. The banks will be severely penalized by not being able to invest in the US if they have unreported US citizens as clients.
I am sure there are many out there finding themselves in situations similar to mine. My nightmare is Canadian but in any country that has signed a FACTA agreement the same rules apply.
Here is my story:
I am a senior, have lived in Canada since 1976 having come here with my then husband looking for work. I became a dual citizen in 1983. Both of my children were born here and as they grew and became entrenched in their Canadian lives it became increasingly more difficult to pick up and come home so we stayed and time just rolled on. I am old now and entrenched in my simple life in the country. I have one adult child here and one in the US.
Although I was aware of needing to file US taxes (the US is one of two countries in the world that taxes its citizens world wide, the other being the terrorist country of Eritrea) my income was below the need for filing. Even if my income had been more substantial the cost of hiring an internationally savvy accountant to prepare the required returns is in the $800-$1,000 range, even if no taxes are owed due to foreign tax credits. Am I being irrational in thinking if I don’t owe any taxes I don’t have to read treaties? Is it irrational to think if I don’t live someplace, don’t use any services, don’t have any benefits that I still owe money? If indeed I am that idiotic then it is certainly time for me to go into a nursing home. I can’t be trusted to care for myself.
Like many ordinary folk I don’t read financial magazines, don’t spend my leisure hours reading tax treaties and live an ordinary law abiding life of a retiree; knitting, tending my garden, walking the dog and shaking my head at Rob Ford. (Or currently trying to keep the snow off of the front walk). I live frugally on a modest monthly self funded retirement plan (RRIF) withdrawal and the Canadian Pension Fund. I file my Canadian taxes using U-File. I answer all the questions in the interview thingy and press send. With my modest income I am not required to file US taxes so I never interacted with a US interview thingy. Is this another thing on my annual “to do” list that I forgot? Get eves troughs cleaned, windows washed, read tax treaties. Freakin’ Hell, I can’t even figure out how to text on my flip phone let alone know where it is.
OH, but wait…..I’m having an unusual moment of clarity. That was the plan all along. Quietly change the tax rules on a low information group who has no representation in congress, no fancy accountants to inform them, impose inordinately harsh penalties and voila….US deficit zero. I’m next writing to the Canadian government to advise them to get on board the gravy train, why are they waiting? FACTA has to work both ways or it isn’t fair. They must quietly change the laws on all Canadians in the US, enact harsh penalties for non-compliance in reporting their IRAs/401Ks and bank accounts. Then tell the US government if they don’t comply in outing them we are not sending them any more NHL players. Good gracious, we could start stockpiling nukes maybe even build a subway to Pearson! Totally groovy.
I have a very small tax free savings account, a checking/savings account and a RRIF. Under the IRS FBAR ruling, which I just found out existed, I was/am required to file forms to the IRS for each account for the past eight years. The Canadian government is boasting that they have negotiated with the US that our tax deferred accounts will not be taxed by the US however a US tax return must be filed, along with incurring the accounting fees, requesting a deferment in paying taxes on these accounts until they are withdrawn. Then you must file a 1040NR. FBAR forms will also be and have been required for these accounts.
The penalty for not having filed these forms, even if no taxes are owed, is $10,000 per form per year for I believe back eight years. I have three accounts requiring FBARs that would be (3 x $10,000) x 8 years = $240,000 in penalties for accounts that I do not owe taxes on. I DO NOT HAVE THIS MONEY! There is also a penalty for not checking a box on the yearly tax IRS tax return for deferring these retirement planning accounts. This means no matter what your income is you have to file US tax returns and pay the hefty accounting fees just to check that box and if you are unable, file your FBARs. Yes, again I’m the poor fool. How exactly was I suppose to know this? Maybe you could start using those drones of yours to drop IRS fliers. (How I did find out was via a neighbor who is a Canadian financial advisor. Her office received a notice regarding FATCA last week and she sent me an email asking if this might affect me. I went on the Google and slowly descended into suicidal depression.)
There is a popular term for people finding themselves in this situation; we are the “minnows”. The low hanging fruit the IRS can “get” with minimal effort. The whales, as the hedge fund, wealthy tax evaders are referred to are more difficult to catch. They have fancy lawyers and accountants and have their cash under a coral reef in the Cayman Islands. We are a good ROI.
Dearest IRS do you understand some of the consequences of doing this? Maybe you don’t care about the “blow back”, the absolute anger and terror you are inflicting on your citizens abroad. Many of us have had to go abroad to find a job that you don’t seem able to provide just to survive. We are doing you a favor not being on welfare or SNAP. How about the tourist/shopping dollars you’re going to forego when we can’t enter the US for the ever increasing potential of going to jail? Many of us care for aging parents in the US, have grandchildren there, folks we are supporting with our foreign dollars. Many of us thought we would go abroad for a while and one day return home. Now if we decide to come home we will be forced into the “Uncle Sugar” plan after we pay the penalties you have inflicted.
You tell us there are voluntary disclosure programs, streamline procedures, many different vehicles for us to become compliant. Just trust you, it will be OK. Take a minute to search the internet for the stories of people who have tried that. The rules change mid stream, you still want your money from people that don’t have it, shouldn’t owe it and all are deemed willfully noncompliant. How can you be willful about something you had no idea existed? But no, of course we are all just evil tax evaders just trying to screw Uncle Sam. Are you kidding? Please don’t wonder why you are increasingly known as the evil empire abroad, even your own citizens are really, really angry and frankly terrified of you. You are destroying any good will that we as mini foreign ambassadors might have spread.
You are leaving us with only one option, an extremely sad option also riddled with land mines, that I never, ever saw in my future. I was an extremely proud American living abroad. I follow MSNBC and Fox just to have the whole picture, vote by proxy and remain very involved in my culture, it is in my DNA. Now you are forcing me to renounce my citizenship. Even then once I apply for renunciation you will deem me a “covered expatriate” if I don’t pay the penalties I owe and force me into bankruptcy. How you manage your “covered expatriates” remains to be seen but my best guess is that it won’t be pretty. You also have to approve my relinquishing and I’m betting that if I owe you money you won’t approve. I am that criminal willful tax evader you have your sights locked on. You won’t let me in, you won’t let me out…..Dear Lord what am I suppose to do? You are throwing granny under the bus. That once coveted US citizenship is now a noose around my neck. Notice to all those seeking the American dream…be careful of what you wish for, you may carry that dream to the poor house. Seems the choice is bankruptcy or never being able to visit your grandchildren, care for your aging parents, never being able to come home……..Thanks.
Americans somehow consider themselves exceptional….yes, they are exceptionally cruel. Once again the 1% will still have the means to avoid taxes and the deficit will be balanced on the backs of the poor. This has become a human rights violation. We are not physically bruised or tortured, it is even worse, you’ve taken our souls.
I would like to remain anonymous as I fear the IRS will come knocking at my door any minute. (Yes, they are making me paranoid. The Canadian government has caved thus far, what’s to stop them from caving a wee bit more.)
I am wondering if “Fifth Estate” might be interested in doing a story on this? Such a program might boost the knowledge base – & result in incredulous / outrage – of average Canadians re. the impact of FATCA, FBAR to Canadians / US persons. I’ve seen many Fifth Estate programs result in changes – and backpedaling – from Canadian government.
@Dual Senior: Thanks so much for having the courage to come forward yourself.
Welcome to Sandbox. You are among friends here.
A few points:
The IGA only says banks will not be required to report TFSAs. It does not say that the US will not tax them or will not levy FBAR penalties for failure to report them. I don’t know if the IRS will or won’t, but I do know some people have cancelled their TFSAs because of that, but others have kept their TFSAs.
In terms of renouncing, I don’t think this is conditional upon you filing with IRS, although you will be expected to file with IRS before or after you renounce. Maybe Pacifica or someone else could give you more information about that.
Third, don’t even think about going into OVDI. That is a program intended for people who are true criminals–not for people like you. However, if you do enter OVDI, you will be treated as a criminal and would be more likely to incur penalties.
@Sasha: Someone contacted a reporter for CBC Fifth Estate. There were a couple of reasons why they said they would not be able to do a story on FATCA. However, it was that contact that led to the earlier stories on CBC Radio and Television. Unfortunately, they have been quite silent on the impact of the IGA on honest Canadians.
Dual Senior. As you know by now, your best option is to do nothing. Why do so many people think they have to play by their rules when the game is rigged?
My son wants me to come live with him in the US when I am not longer able to care for myself on my own….which is looming unfortunately. That is now an option not available to me. What do you do when the game is rigged but you still have to play? (I’m whining and cant’ stand myself but I’m terribly frightened).
Dual Senior. That adds a whole new layer of complexity. I apologize for being so blunt
@Dual Citizen: Certainly the possibility of moving to United States to live with or near your son complicates things for you.
If you renounce, I don’t know if you would be permitted to move to the US to live there. I think you would then have to apply as a non-resident alien. Does anyone else know the answer to that?
In addition, I don’t know what health care coverage you might be entitled in the US if you were to move there in your senior years either as a citizen or as a renounced citizen.
This certainly has complicated the lives of many of us!
No apology necessary, I would agree with you totally if I didn’t happen to be me!
@ Dual Senior and Blaze,
Yes, Blaze correct when she writes, “In terms of renouncing, I don’t think this is conditional upon filing with IRS, although you will be expected to file with IRS before or after you renounce.”
Dept of State deals only with the citizenship itself; and citizenship, or loss of it, is not dependent on one’s tax status.
DoS doesn’t concern itself with IRS matters, basically don’t care, not their department. Dept of State’s only involvement/connection with tax is the following:
(1) At the consulate the person signs DS-4081, the Statement of Understanding of Consequences. One of the 12 items in this Statement is Item 10, which refers to tax consequences.
http://www.state.gov/documents/organization/81607.pdf
(2) Dept of State is to provide IRS with a copy of each CLN they issue, as per DoS Interagency Coordination and Reporting Requirements.
http://www.state.gov/documents/organization/113465.pdf
You can renounce prior to filing back tax forms.
You have until June 15th of the year following your renunciation to certify that you have been tax compliant for the five years prior to your renunciation.
This certification is a yes/no question on the exit tax form (8854), which reads: “ Do you certify under penalties of perjury that you have complied with all of your tax obligations for the 5 preceding tax years?”
So, to wrap things up with IRS, if you renounced on, say, 23 January 2014, you’d have to have filed the following with IRS by June 15th, 2015 (when I write 1040s, I mean any other forms required with it as well):
(1) 1040s for 2009-2013,
(2) a partial year 1040 for all income to 1 Jan – 22 Jan 2014;
(3) for your US source income, a partial year 1040-NR for 23 Jan – 31 Dec 2014, declaring only your US source income.
(4) 8854.
If a person doesn’t file, it causes “covered expatriate” status with IRS http://www.irs.gov/pub/irs-pdf/i8854.pdf. However, the citizenship itself remains terminated as of renunciation day and the CLN remains valid.
Brothers . . . just got the “Tax Alert” email below from our accountant who looks after our business, informing us about the tax implications of U.S. citizens. Didn’t take them long to jump on this band wagon! Of course, there’s lots of $$ to be made by accountants, so they are probably gleeful about FATCA, IGA etc. As they have no idea I am a U.S. person, I assume they sent the same email to all their clients.
TAX ALERT
Are you a citizen of the United States?
Citizens of the United States living in Canada have tax compliance and financial reporting requirements that, if not met, could result in significant taxes, interest and /or penalties. Are you a citizen of the United States who could be subject to these charges?
Generally, you are a US citizen if:
· You were born in the US,
· You underwent the legal process of naturalization to become a US citizen, or
· Both of your parents were born in the US even if you were born in Canada
You could be a US citizen if:
· You were born after December 23, 1952 and before November 14, 1986 and
Ø One of your parents is a US citizen, and
Ø That parent was physically present in the US for at least 10 years prior to your birth (at least 5 of which were after age 14)
You could be a US citizen if:
· You were born on or after November 14, 1986 and
Ø One of your parents is a US citizen, and
Ø That parent was physically present in the US for at least 5 years prior to your birth (at least 2 of which were after age 14)
You could also be a US citizen under other criteria.
The determination of US citizenship is complicated. If you require assistance to determine whether or not you are a US citizen, please contact us and we can refer you to an immigration lawyer.
Has anyone else received this type of “alert” from their accountant?
I haven’t.
Someone pointed out to me the other day that it might be a good idea for Americans abroad who are having children abroad to NOT file a U.S.consular report of birth abroad. It’s not required by any law and not filing doesn’t mean that the child can’t claim citizenship later (just means a little less paperwork).
I like it because it gives the child a choice. When he or she is old enough he can march down to the embassy himself if he wants to – hopefully with full knowledge of what the responsibilities of US citizenship are. If not then there will be no record on the US side that he is one. (Though I imagine that if someone looks hard enough they will figure it out).
Victoria: That’s a good point. I was speaking recently with a couple who dragged their teenage daughter to the US Consulate many years ago to register her as a U.S. citizen when she was about 16. She insisted she did not want to be an American.
Now a mother herself, she still does not want to be a US citizen–for even bigger reasons than before.
Relinquishment or renunciation of US citizenship must be voluntary. Shouldn’t acquisition of US citizenship be the same, especially for children born outside United States or “accidental” Americans born in US to non-US parents?
@ Blaze…..
Americans don’t look at it that way. If you were born on the plantation, or were born off the plantation to somebody from the plantation, the master in the big house wants to know about it.
@ArcticGreyling: I know how the Americans consider it. I was just suggesting what a reasonable approach should be. Of course, there is nothing reasonable about the Americans on this topic.
Gotta mostly agree with Arctic Grayling: doesn’t matter if registered as a birth abroad or not if the facts are there (one parent with enough “time served” in the US or a child born to two US parents living abroad). Here is what I put together for issues for the potential Charter Challenge, which will touch on that, http://isaacbrocksociety.ca/2014/03/08/you-can-send-in-your-comments-on-the-legal-opinion-and-we-will-forward-these-to-the-constitutional-lawyer/comment-page-1/#comment-1200073.
i.e., A CLAIM to US citizenship, I can understand — not an automatic “another slave born” and, in some cases, entrapped with no possible way out through renunciation (which theirs would have to be as they are born that awful word to me: DUAL).
I heard there is a Amnesty to all Canadian residents with US ties until June 14 to complete 3 years od taxes and 6 years of FBAR without penalties. Seems easy enough. What are the cons of going through with this?
A bit more background on me. Been here 40 years, did all my school here from kindergarten to University, never worked or owned property in the US. I am a Canadian citizen. Just trying to figure out what are cons of taking advantage of the Amnesty program.
@ScaredCanadian
I am curious about the amnesty program as well. Sorry I don’t have answers for you, maybe someone will.
My US Consulate appointment to document my relinquishment in 2008 is coming up soon. I wonder about filing back taxes.
John Richardson spoke about this at the information session in Vancouver back in February. I believe he mentioned filing 5 years of back taxes to avoid an exit tax. Fortunately I am not among the wealthy and do not believe that I would owe the IRS two cents. But if filing taxes will help fend off the IRS, it may be worth the paperwork.
Could anyone point to a source which would give accurate information about these tax issues to help avoid unwanted stress from the IRS?
To me the biggest con is that it is called an amnesty program as if you had performed a criminal act. The second major con is that it is designed to get you BACK into compliance so that you would continue to file forever more. If you became a Canadian 40 yrs ago, you may well have been deemed to have given up your US citizenship at that time. If that’s the case, you have no obligations.
Amnesty program is the same as Offshore Voluntary Disclosure Program -to be avoided at all costs – I get it. But I assume that in some cases, filing back tax forms may be necessary for freedom from the IRS and US.
There is a slightly outdated but very interesting GAO report here http://www.gpo.gov/fdsys/pkg/GPO-CPRT-JCS-2-03/pdf/GPO-CPRT-JCS-2-03-9-2.pdf
It basically stated that the IRS had no way to enforce its’ rules against non resident former citizens who had no US assets and more importantly, they didn’t even try.
@ScaredCanadian – be very, very sure you do lots of research before you make a decision. I think our situations are probably similar, and I, for one, will not enter into a so-called ‘amnesty’ program. I am NOT a criminal. What’s right for you only you can decide, but make sure you take the time you need to make the right decision for your situation.
I have decided, just recently, that I’m going to apply for my back-dated CLN. I wasn’t going to for two reasons: 1) principle and 2) fear of getting on the IRS radar. However. since our Canadian gov’t has sold us down the river, I’m now thinking I do have to have the rotten thing to prove to the banks that they cannot send my private financial information to a foreign govt.
@ScaredCanadian: First, remain calm (easier said than done, as we all know). Do not panic. Take a deep breath.
Do NOT go into amnesty. That is the same as OVDP. Stay away!
At one of the Information Sessions, lawyer John Richardson said:
This is NOT for you. John also said anyone who is thinking about entering OVDP should “Call John!” no matter what time of day.
Review the information in the link in this thread on Solving The Problem of US Citizenship.
Before we can make suggestions, we need to know more about your situation. Are you a naturalized Canadian? When did you become a Canadian citizen? Were you a minor at the time? Were you a Canadian from birth because one or both of your parents were Canadian citizens. All of those points are key to knowing what your options are.
We need to know was it prior to 1986? Prior to 1995? Prior to 2004? After 2004?? Plus all the questions above. Those are all important points.
@PatCanadian: Likewise, you should NOT go into amnesty/OVDP for the reasons above. Because you became a Canadian citizen after 2004, you should be able to relinquish by reporting your expatriating act of 2008 to a US Consulate provided you have not had a US passport (There may even be some exceptions to that), have not voted in US elections and have not filed returns with IRS (a Catch 22!) There is an expectation that you will need to be compliant for five years, but this is not a condition of getting a CLN.
Do NOT go into OVDP!!!!
Note to all: I am not a lawyer. I am not an accountant. None of this information is intended as legal or accounting advice. It is simply common sense based on what I have learned from others in almost three years of being involved in these issues.
KalC Fascinating reading. What a joke all those rules and regulations are, since it all seems to have gone into a black hole somewhere.
@Blaze
No worries…I am not going into OVDP. I have a Canadian passport, have voted in Canada not US since coming here. I am non-compliant in filing US taxes. Your catch 22 comment was very interesting (not filing US taxes is requirement for relinquishment!). My question is whether or not to file back taxes after my Consulate appointment for Relinquishment to avoid IRS exit tax and being considered a “covered” person? Thanks Blaze.
@Blaze. I Became a naturalization Canadian citizen in 2009. I am married to a Canadian for 13 years. How does this affect my situation?
@ScaredCanadian: First the good news. Because you are a Canadian citizen, Canada Revenue Agency does not and will not collect taxes or penalties for the IRS. Canadian courts have ruled in the past that IRS has no jurisdiction in Canada, so IRS would have no way of collecting if you did owe anything to IRS.
Because you became a Canadian citizen after 2004, IRS considers your date of relinquishment of US citizenship for tax purposes to be the date you advise the US Department of State at a US Consulate or Embassy. There will be an expectation that you file five years of back returns. If you do that and your networth (including value of your home) is under $2 million and your tax liability is less than $155,000 per year (I think those are the numbers), you will not be subject to an Exit Tax.
The fact you are married to a Canadian is irrelevant–except that the FBAR (Foreign Bank Account Report) that you will be required to make to the IRS will include all of the assets and accounts you hold jointly with your Canadian spouse.
Your options are 1. Do Nothing. 2. Apply for a CLN at a US Consulate and file five years of returns. 3. Apply for a CLN at a US consulate and don’t file years or returns. 4. Don’t apply for a CLN and file five years of returns and plan on filing in the future.
There are pros and cons of both. Some will say Take Option One. (that is what I personally would do). Others will say Option 2 is best.
I think all of us here would agree, whatever you do No NOT go into OVDP (Amnesty)!
@Blaze Thank you so much for the info. I will be thinking about the options you outlined. This will be a tough decision. I wonder about the probably 90 percent or more of the over 6 million people across the world who have no idea that they are in the same situation. Will the US attack and strip the common law abiding citizen of their wealth on the world stage?
@Scared: The United States will do whatever it can to punish anyone born in US who chooses to live elsewhere or (GASP) become a citizen of another country.
This isn’t about taxes. This is about power and control. The US used to punish us for becoming citizens of other countries by stripping us of US citizenship. Now, they punish us by trying to force us to remain US citizens so they can financially terrorize us.
As John Richardson said at one of the sessions:
“U.S. citizenship is probably the most dangerous, toxic citizenship in the world today.”
Am I still seen by the US as a citizen? Became Canadian in 1973–never had a US passport. At the citizenship ceremony, I sgned a statement that I realized I was losing US citizenship by becoming a Canadian. The court clerk took the statement away and I never saw it again, nor did I ever see a CLN. Have voted etc in Canada. I don’t think I am still a US citizen, but I don’t know what they think so I have not crossed the border since 2011 when I began to hear about Fatca, etc. Help!
Hi,
Just found out by accident yesterday that I may be a US person still for tax purposes? Both my parents are Canadian, went to work in Canada in the 70?s, I was born in 1973 and moved back to Canada at age 1 in 1974. I have not lived in the US since the age of 1! Never earned money there, never had a US passport, and became a Canadian Citizen in my teens. I am confused and have no idea what my next steps are….
It’s important to know how old you were when you ‘became a Canadian in your teens” You may not be US citizen. It’s very complex.
Voluntarily acquiring another citizenship after the age of 18 is one of several ways of losing US citizenship.
Your case is complicated by the fact that you might have been a dual citizen at birth.
Don’t panic, don’t rush. Educate yourself. Don’t enter an amnesty program of any kind.
You could start here but this is only the start of a long process:
http://isaacbrocksociety.ca/2011/12/12/relinquish-dont-renounce-if-you-can/
The link above to :”what you should consider before contacting a lawyer” is broken.
Try this one instead: http://citizenshipsolutions.ca/2013/07/10/what-you-should-consider-before-contacting-a-lawyer/
@HonestCanadian, welcome to the Maple Sandbox. Sorry you’re embroiled in this, as well. Duke of Devon gives some good advice – particularly about not panicking or rushing. That’s very important. When we first find out about this, we usually tend to do both, resist that urge. Read as much as you can here, at Isaac Brock Society and Citizenship Solutions. Talk to people, mull it over and then talk some more.
I’m a little confused about how you became a Canadian citizen in your teens when you were already a Canadian citizen, would you mind sharing a bit more about that so we have a better picture of your situation?
@Duke of Devon, thanks for the letting us know about that link, I’ve fixed it.
This is all new to me…was born and raised in Canada to Canadian parents and have never lived a day outside of Canada. In my 20’s my father decided to acquire US citizenship through one of his parents (both deceased at the time). He received citizenship and thought it would be beneficial for my brother and I to have. So now my brother and I have US passports but with Canada as our birthplace. After reading the news recently, I see that I was supposed to file tax refurns which I’ve never done. Suffice to say I’m confused about what to do and concerned about repercusions coming. I have no ties to the US, my father sadly has since passed and am considering the impact of renouncing my US citinship…
@Miasposa: Welcome to Sandbox. You are among friends here.
The first thing to do is take a deep breath. Do not panic or rush into anything. Do not allow fear mongering accountants or others to terrorize you into complying with the IRS.
The answer to your question is not an easy one.The issues are very complex, so learn as much as you can.
You were born in Canada, so if your bank asks y0u where you were born for FATCA, you can honestly say Canada.If they ask you if you are a US citizen, you will need to decide how you want to reply to that.
Renouncing would be complex and costly. The new fee to renounce is $2350 US. You would be expected to file five years of returns with IRS. You may not owe anything, but accounting fees may be exorbitant and some accountants may try to convince you that you owe penalties for not declaring your assets previously to the US.
Remember, Canada Revenue Agency does not and will not collect for IRS on anyone who is a Canadian citizen. Canadian courts to date have ruled IRS has no jurisdiction in Canada. Some speculate that could change, but we have seen no indication that it will.
I am perplexed by your description of how you acquired US citizenship. Did your father live in the US for five years after the age of 14? If not, I do not think he could legally pass US citizenship on to you. Yet, you have an American passport, so it seems Department of State accepted that you are a US citizen.
My personal advice is: Get a Canadian passport if you do not already have one. Do not renew your American passport. Live your life as a Canadian only. Do not tell your bank you have an American passport. Do not file returns with IRS. Do not renounce.
If you find this advice helpful, please consider donating to the legal challenge fund at adcs-adsc.ca to challenge FATCA in Canadian courts.
Please note, I am not a lawyer or accountant and this is not legal advice. It is just common sense practical information from three years of following these issues.
Others may have different advice. You will need to do whatever gives you the most peace of mind, but feel free to ask questions that will help you to make your decisions.
Lynne–aka Blaze
Lynne. You sound just like KalC. Don’t know whether or not that’s a good thing. Miasposa would do well to heed your advice.
@Miasposa, welcome to the Maple Sandbox, I’m truly sorry to hear that you’re caught up in this nightmare. Like Lynne, I don’t quite understand how the US gave you citizenship, however the fact that you have the passport says they did. I’m really curious about when you received the citizenship, if you’re willing to share more of your story we’d love to hear it, this is a situation I haven’t heard of before.
As Lynne said, don’t make any rash decisions, make sure you fully inform yourself of all of your options and the ramifications of each.
Most of all don’t panic – keep firmly in the front of you mind that the CRA will not assist the US in the collection of taxes or fines. That’s very important to remember.
Although Miaposa said this happened during her 20’s (I would think that in her 20’s, she would have to apply herself as an adult?), this could have been the way her father applied for US citizenship for his children:
http://london.usembassy.gov/cons_new/acs/passports/robirth.html
Children of American citizen parents who are not eligible for U.S. citizenship at birth may be able to acquire U.S. citizenship through expeditious naturalization or an immigrant visa.
Expeditious Naturalization Through A Grandparent
Under the Child Citizenship Act of 2000, a child under age 18 who has a U.S. citizen grandparent who meets the physical presence requirements may qualify for expeditious naturalization under the Immigration and Nationality Act. Although not entitled to U.S. citizenship at birth, the child can, through this procedure, become a U.S. citizen by naturalization without first having to take up residence in the United States. It is, however, necessary for the child to travel to the United States for the naturalization, and all applications and documentation must be submitted and approved beforehand. For information and application material for expeditious naturalization, please write to:
USCIS Headquarters
Field Operations Directorate, 2nd Floor, Suite 2008
111 Massachusetts Avenue, NW, MS2030
Washington, DC 20529 – 2030,USA
This procedure must be done through the United States Citizenship and Immigration Services. The process can take from six months to a year or more.
*********************
http://london.usembassy.gov/cons_new/acs/passports/citizenship.html says:
If you were born outside the United States, have not been previously documented as a U.S. citizen and are:
under the age of 18: please see our instructions for obtaining a Consular Report of Birth Abroad;
over the age of 18: you should review the information concerning transmission requirements to see if your parent(s) had the prerequisite physical presence in the United States required by U.S. citizenship law in effect at that time. If, based on this information, you believe you have a claim to U.S. citizenship, please click here and follow the instructions provided.
**********************
It would be interesting to know if any of these “claims” for US citizenship are accepted incorrectly. (It seems my husband would have had to claim his “US citizenship” through his grandparents, as his dad moved from North Dakota to Saskatchewan with his family when he was four years old — but it may have been because of the “regulations” way back when that happened, not when he became a “US citizen” (through the Calgary U.S. Consulate) in 2000 or 2001. He has now, of course renounced that ill-claimed US citizenship, whether or not it was properly “given” to him.)
My father passed away many years ago and there is no family surviving that I’m aware of in order to get some history of how his citizenship came about. I do remember standing side by side with my father as we took our oaths together in order to complete our citizenship requests at a US Consulate. I have a current and up to date passport and social security card. I don’t doubt that I have valid US citizenship….I assume that I received citizenship as a child of a US parent, albeit an adult child.
Thanks so much for all the advice, it’s been a very trying time to say the least. I am concerned by the impact this could have on my husband, as we own our own home, have modest investments & work pension all considered foreign gains. I will not be able to afford paying 2 sets of taxes once I retire either. And what of the impact on my children and the estate tax? The long greedy arm of the IRS knows no bounds!
I haven’t come to any decision and more then likely feel am under the US’ radar but am having a hard time burying my head in the sand and hoping for the best. I just don’t function that way…
@Ward Moway, if you’re still monitoring this thread and no one has told you (I am replying belatedly because I’m only tracking threads sporadically these days)
Anything you signed and submitted during your Canadian citizenship ceremony should be on your citizenship file with Citizenship and Immigration Canada. For the payment of a $5 fee (and a wait of several weeks or maybe a couple of months, depending on their workloads) you can get a copy of the contents of that file through an Access to Information Request, as is your right under Canadian law. The link for the application is here:
http://www.cic.gc.ca/english/department/atip/form-imm5563.asp
It is possible that your Canadian financial institutions might accept a copy of the document that you mention as prima facie evidence you aren’t a US citizen and hence (as not a US resident) not a US person and not reportable under FATCA, but that isn’t certain. What is I think quite clear is that submission of that form as part of a claim to the State Department for having relinquished your USC in 1973, would be iron-clad and compelling evidence that you knew what you were doing and intended to relinquish at that time. As long as you’ve done nothing to assert USC since then, you should be home and dry for a back-dated CLN. I’m not a lawyer, but that’s my advice. I know several people who got back-dated CLNs without the benefit of a document like yours (Canada stopped requiring renunciation of prior nationality upon become Canadian back in 1973, April I think it was but I’m not sure). So a copy of that document, which certainly should be in your citizenship file, would be a silver spike through the vampire’s heart/final nail in the coffin/icing on the cake (pick your metaphor). IMHO.
@Ward: I hope you are still following this. I apologize for not responding sooner. I was in the hospital when you posted.
I agree with Schubert’s advice to get information from your citizenship file. I did that on his advice over two years ago. It was the best $5 I have ever spent. My 1973 file contained a signed and witnessed oath renouncing other citizenship. This was a I requirement until April, 1973, so depending on when in 1973 you became a Canadian citizen, it may also be in your file.
We do not know for certain if Canadian banks will accept this, but a copy in my safety deposit box and with my lawyer and accountant. I don’t know how any Canadian bank could refuse to accept that, but there have been far too many unpleasant surprises since this nightmare entered our lives three years ago.
I advised a man in B.C. to get that document from his file. He presented it to CIBC. They said they had never seen it before, but they accepted it as evidence he is not a U.S. person.
Information was maintained on microfiche, so it is difficult to read, but it I’d legible.
@Miaposa: The most important thing to remember iiis CRA does not and will not collect taxes or penalties for IRS from any Canadian citizen.
Again, do not rush into anything. Learn all you can, carefully consider your options and do whatever gives you the most peace of mind.
@Lynne Glad to see you’re back and able to “keyboard” more easily. Best wishes for a continued and speedy recovery.
Also that is very good news about the BC man whose CIBC branch accepted his renunciation oath during his citizenship ceremony as evidence that he is not a US person. Let’s hope other banks and financial institutions in Canada are similarly inclined. Perhaps keeping the identity of that branch and man in reserve, if he’s willing, might be helpful if cases arise in other banks in Canada where such documentation isn’t accepted and the rejection is to be challenged in court.
I’ve heard (hearsay evidence, obviously) that US officials at the border won’t accept an oath of renunciation sworn before anyone other than a US consular officer, so if things every get testy at the US border for crossing on a Canadian (or other) passport showing a US birthplace, that might not be enough to get you into the country if you need to travel there. However this remains to be seen. Like Lynne, I can’t imagine how any financial officer or government official in Canada could ignore evidence of an oath sworn and signed in a Citizenship Court (which is as legitimate a court of law as any other court in Canada), and if CRA were to ignore it I think one would have a hell of a good court case against them. Since CRA is federal and so are citizenship courts …
@Schbert: The pre 1973 renunication oaths are witnessed by a Citizenship Canada official, which I think would make it very difficult for any bank to refuse to accept.
I hope they all show the same common sense as CIBC did. However, I do not trust them. For example, CRA guidelines are very clear. Banks are not required to ask for place of birth, but some are. That shows that some banks–i.e. TD–care more about American law than protecting their Canadian customers with the gift CRA handed them on a silver platter.
Like me, the man in B.C. is not prepared to go anywhere a US Consulate or to ever cross the U.S. border again, so that copy of his renunciation oath works for him.
Question:
If you are indeed a dual citizen, but you were not born in the US, if you do not self-identify who is going to know?
@Veneziad, well, you might have to self-identify if your bank asks you point blank if you are a US person, or if you were born in the US. The penalty for lying to the bank is possible closure of accounts, according to their websites. If they don’t ask, that’s a different story.
@OutragedCanadian
re. “The penalty for lying to the bank is possible closure of accounts, according to their websites”.
Do you know if this mean “closure of accounts” or “freezing one’s accounts”?
Thanks
Everyone has probably noticed comments, especially at the Globe and Mail, by studentadvocate. Here’s one from half a year ago which might bring some reassurance to some people. I’m thinking studentadvocate might just be a law student — certainly seems knowledgeable.
http://www.theglobeandmail.com/report-on-business/are-you-an-accidental-american-pwc-alerts-customers-to-us-tax-obligations/article19832567/comments/#gigyaComments_a4dca43aec3b42729de20663c2b4e9ca
@Sasha, hm, I’m not entirely sure. From CIBC’s website, this is all I could find:
CIBC’s right to freeze or close your Account. CIBC may freeze or close your Account without notice if required by law or if at any time CIBC has reasonable grounds to believe that you did or may commit fraud, use the Account for any unlawful or improper purpose, cause a loss to CIBC, operate the Account in a manner unsatisfactory to CIBC or contrary to CIBC policies, or violate the terms of any agreement applicable to the Account or any account-related service. CIBC may also freeze or close your Account if you are a victim of fraud or identity theft in order to prevent future losses.
Tangerine says,
We also have the right to close your Account for any reason
Maybe someone else out there has a better answer.
Timely comments . I was fascinated by the facts – Does anyone know where I could possibly obtain a template 2013 IRS 8854 form to edit ?
Trey Ferber,
Hope this works for you:
http://formupack.com/pdf-Forms/Tax2013/IRS-InternalRevenueService/Tax2013IRS_f8854_20131206.pdf